Strong dollar pushes up international funds performance
Indian Mutual Fund
According to Value Research, a mutual fund tracking entity, International equity funds as a category have been successful over last one year by restricting losses to 3.52% outperforming other categories of diversified equity funds. Multi Cap and large cap funds as a category have lost 9.55% and 10.56% over one year.
Though Indian equity markets are weak for some time now with Nifty losing 11.41% and 11.71% over last one year and three months respectively, US dollar is the another reason for such outperformance by international funds. "Weak rupee does help funds holding dollar denominated assets and shows improvement in performance," says Hiren Dhakan, associate fund manager, Bonanza Portfolio.
The case in point is Motilal Oswal Most Shares NASDAQ-100
ETF. It has delivered 31.14% returns over one year leaving behind most Indian
diversified equity funds. The fund is an index fund and tracks NASDAQ-100
index. Over last three months the fund has delivered 9.55% returns when the
underlying index is down 1.57%. The upside the fund has seen is an outcome of
weak rupee against dollar.
Another fund from the international fund category that has done well with
11.70% is ING Global Real Estate Fund followed by Birla Sunlife International
Equity Fund with 6.92% yearly return. "This may not be a great entry point
in these funds, as global macro economic scenario is not encouraging and rupee
is at a low against USD. Any positive move in rupee against USD, may wipe out
returns offered by these funds," add Hiren Dhakan.
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