International mutual funds invest in overseas securities. However, there are also funds that have exposure to domestic securities along with international securities.
For example, the ICICI Prudential US Bluechip Equity Fund is an equity mutual fund that invests predominantly in the stocks of large companies listed in the United States of America.
However, Parag Parikh Flexi Cap Fund is an equity mutual fund that has exposure to domestic and international markets. As of 31.12.2024, this fund’s portfolio includes Meta, Microsoft, and Amazon stocks along with domestic stocks of HDFC bank, power grid, Coal India, ITC, etc. So, if you invest in this fund, you’re indirectly owning stocks of domestic and International markets.
These funds are suitable for investors who seek long-term capital appreciation. So, if you don’t want to invest your money for a long term, say less than 5 years, you should not consider investing in these funds.
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FAQ;
1. Are international mutual funds tax-free?
No, these funds are not tax-free. They are taxed like other mutual funds. However, there is a different taxation criterion for equity-oriented mutual funds and non-equity-oriented mutual funds. So, you don't get any exemption or tax benefit in investing in these types of funds.
2. What are some of the good international mutual funds to invest in now?
Until you read the information document of mutual funds or learn about the investment objectives of the funds, you can't be sure whether the fund meets your requirements or not. So, the same fund may not be suitable for two different types of investors.
Also, the past performance of a fund is not a guarantee that the fund will keep on delivering the same results in future. It may underperform or outperform its own past results.
3. Are they better than domestic mutual funds?
As already stated above, it depends on customers' preferences. If an investor wants solely exposure to international markets then they can be good for such investor.