What is the story about?
Indian investors have multiple ways to access global equities as part of long-term portfolio planning, offering exposure to sectors and markets not available domestically, according to Niharika Tripathi, Head of Products & Research at Wealthy.in.
“Even a modest allocation to global markets can reduce portfolio volatility and create a smoother investment journey,” Tripathi said.
Why global exposure matters?
Data from WhiteOak AMC shows that the correlation between Indian equities and other emerging markets (excluding India) is around 0.6.
Tripathi explained that in practice, this means if Indian equities fall by 5% in a month while other emerging markets rise by 6%, a portfolio with 20% global exposure could limit overall losses to around –3% instead of –5%.
Over time, such offsetting movements can help create a more stable, all-weather portfolio.
Global exposure also allows investors to access sectors underrepresented in India, such as US technology, artificial intelligence, and healthcare.
Regulated ways to invest globally
Tripathi outlined two main routes for Indian investors to access global markets:
International mutual funds
Indian mutual fund schemes, often structured as fund-of-funds, invest part or all of their portfolio in overseas equities, bonds, ETFs, or foreign funds. Investors contribute in rupees while the fund manager handles forex, custody, and regulatory compliance.
RBI and SEBI limit total overseas investment by Indian mutual funds to $7 billion, with an additional US$1 billion for overseas ETFs.
Each AMC can invest up to $1 billion, while the ETF window is shared across the industry.
Tripathi noted that when these limits are reached or nearly reached, fund houses may pause inflows, preventing fresh lump-sum investments, SIPs, or switches into affected schemes.
GIFT City
The Gujarat International Finance Tec-City (GIFT) operates as an offshore jurisdiction regulated by the International Financial Services Centres Authority (IFSCA). Funds in GIFT City benefit from fund-level taxation and exemptions for certain foreign securities.
Individuals can invest up to $250,000 under the Liberalised Remittance Scheme (LRS).
GIFT City funds can invest in a broad range of global markets and themes. Tripathi emphasized that these allocations are separate from domestic mutual fund SIPs.
Determining the right global allocation
Tripathi said the ideal global allocation depends on goals, risk appetite, and investment horizon:
Risks to avoid
Tripathi cautioned against theme-chasing or over-concentrating in sectors like AI or US technology. She cited the November 5, 2025 Nasdaq correction, when the index fell about 2%, wiping out nearly $730 billion in US equities, as an example of sector-specific risks.
Holding multiple international funds can increase duplication, costs, and monitoring complexity. In contrast, GIFT City allocations allow professional fund managers to handle allocation decisions across countries and sectors.
Integrating global exposure into long-term planning
Tripathi explained that global equities should be a strategic slice of an overall portfolio, complementing domestic holdings.
They reduce portfolio volatility, support long-term compounding, and provide a hedge against rupee depreciation or India-specific economic shocks.
“Global equities are no longer a luxury; they are core portfolio hygiene,” Tripathi said.
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“Even a modest allocation to global markets can reduce portfolio volatility and create a smoother investment journey,” Tripathi said.
Why global exposure matters?
Data from WhiteOak AMC shows that the correlation between Indian equities and other emerging markets (excluding India) is around 0.6.
Tripathi explained that in practice, this means if Indian equities fall by 5% in a month while other emerging markets rise by 6%, a portfolio with 20% global exposure could limit overall losses to around –3% instead of –5%.
Over time, such offsetting movements can help create a more stable, all-weather portfolio.
Global exposure also allows investors to access sectors underrepresented in India, such as US technology, artificial intelligence, and healthcare.
Regulated ways to invest globally
Tripathi outlined two main routes for Indian investors to access global markets:
International mutual funds
Indian mutual fund schemes, often structured as fund-of-funds, invest part or all of their portfolio in overseas equities, bonds, ETFs, or foreign funds. Investors contribute in rupees while the fund manager handles forex, custody, and regulatory compliance.
RBI and SEBI limit total overseas investment by Indian mutual funds to $7 billion, with an additional US$1 billion for overseas ETFs.
Each AMC can invest up to $1 billion, while the ETF window is shared across the industry.
Tripathi noted that when these limits are reached or nearly reached, fund houses may pause inflows, preventing fresh lump-sum investments, SIPs, or switches into affected schemes.
GIFT City
The Gujarat International Finance Tec-City (GIFT) operates as an offshore jurisdiction regulated by the International Financial Services Centres Authority (IFSCA). Funds in GIFT City benefit from fund-level taxation and exemptions for certain foreign securities.
Individuals can invest up to $250,000 under the Liberalised Remittance Scheme (LRS).
GIFT City funds can invest in a broad range of global markets and themes. Tripathi emphasized that these allocations are separate from domestic mutual fund SIPs.
Determining the right global allocation
Tripathi said the ideal global allocation depends on goals, risk appetite, and investment horizon:
- Young earners: 20–25% of equity allocation via broad global or US index funds through SIPs.
- Mid-career families: ~15% allocation for diversification and currency exposure while keeping domestic equities as the core.
- Retirees: 5–10% allocation for diversification without introducing excessive volatility.
Risks to avoid
Tripathi cautioned against theme-chasing or over-concentrating in sectors like AI or US technology. She cited the November 5, 2025 Nasdaq correction, when the index fell about 2%, wiping out nearly $730 billion in US equities, as an example of sector-specific risks.
Holding multiple international funds can increase duplication, costs, and monitoring complexity. In contrast, GIFT City allocations allow professional fund managers to handle allocation decisions across countries and sectors.
Integrating global exposure into long-term planning
Tripathi explained that global equities should be a strategic slice of an overall portfolio, complementing domestic holdings.
They reduce portfolio volatility, support long-term compounding, and provide a hedge against rupee depreciation or India-specific economic shocks.
“Global equities are no longer a luxury; they are core portfolio hygiene,” Tripathi said.
ALSO READ | Why debt mutual funds are meant to stabilise portfolios, not create wealth
