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Updated Apr 6, 2026 09:53 PM IST
International mutual funds have outperformed domestic peers, with triple-digit returns versus modest gains in Indian equities, prompting investors to rethink portfolio concentration, diversification strategies, and global asset allocation.
Mutual Funds: Amid a sharp divergence in returns, international mutual funds have significantly outperformed their domestic counterparts, raising questions about portfolio concentration. While overseas funds delivered triple-digit gains, most Indian equity funds posted relatively modest returns, prompting investors to reconsider diversification strategies and global asset allocation.
International mutual funds
According to 'Value Research', these are the international mutual funds with highest returns in one year:
- Nippon India Taiwan Equity Dir -- 161.66 per cent
- DSP World Gold Mining Overseas Equity Omni FoF Dir -- 129.90 per cent
- DSP World Mining Overseas Equity Omni FoF Dir -- 97.92 per cent
- ICICI Pru Strategic Metal and Energy Equity FoF Dir -- 76.06 per cent
- DSP Global Clean Energy Overseas Equity Omni FoF Dir -- 69.55 per cent
Domestic mutual funds
According to 'Value Research', these are the domestic mutual funds with highest returns in one year:
- DSP Nifty PSU Bank ETF -- 29.75 per cent
- Mirae Asset Nifty PSU Bank ETF -- 29.70 per cent
- HDFC NIFTY PSU BANK ETF -- 29.48 per cent
- ICICI Pru Nifty PSU Bank ETF -- 29.41 per cent
- Kotak Nifty PSU Bank ETF -- 29.27 per cent
- ICICI Pru Midcap Dir -- 13.63 per cent
- BHARAT 22 ETF -- 11.32 per cent
- ICICI Pru Bharat 22 FOF Dir -- 11.18 per cent
- HSBC Midcap Dir -- 10.92 per cent
- ICICI Pru Retirement Pure Equity Dir -- 10.76 per cent
Multi asset investing
Indian stock markets have fallen sharply due to the Iran war. Investors who relied solely on Indian equities have suffered significant losses, once again highlighting the importance of diversification. This has also sparked discussions on why investors should consider global options and opportunities beyond the Indian market.
Sachin Sawarkar, Managing Partner at Arth Bharat Investment Managers IFSC LLP, said that while the country offers strong long-term growth opportunities, focusing solely on the domestic market can limit the benefits of diversification. He emphasised the need for a portfolio that can perform well across different economic cycles, allowing investors to benefit from diversification across economies, sectors and currencies.
Sawarkar added that India remains an attractive market due to urbanisation, digital transformation and rising consumption. Meanwhile, the United States continues to be a leading market driven by technology, innovation and deep capital market capabilities. Therefore, investors should adopt a balanced approach rather than concentrating their entire investments in a single market or sector.
Build your portfolio the right way
A well-structured portfolio combines both growth and stability assets. Equities help build wealth over the long term, while fixed income provides income and stability. Gold offers protection during uncertain times and currency fluctuations.
International investments provide geographic diversification and exposure to global sectors that are not always available in the domestic market. Maintaining a balanced allocation across these asset classes helps create a portfolio that can perform effectively across different market cycles.
For investors aged 30 to 40, investing around 10 to 20 per cent of their portfolio in global markets can provide good diversification across currencies, economies and sectors.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
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