In a discussion, Chintan Haria from ICICI Prudential AMC and Mohit Gang, CEO and Co-Founder of Moneyfront.in, explored the advantages, drawbacks, and options for Indian investors interested in global equities.
Haria said that international investing has its appeal, especially as more investors focus on diversifying their portfolios. According to him, ICICI has long advocated for asset allocation, suggesting that a 10% to 15% investment in international markets could be beneficial. However, he added that international markets operate differently due to the involvement of various countries, each with unique economic cycles.
For instance, said Haria, Japan’s recent performance is an example of how different regions present unique opportunities. Haria emphasized that while global access has become easier, investors should still seek professional guidance and fully understand the process, as specific restrictions may still apply.
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Gang agreed with Haria’s points and further stated the importance of diversification. He pointed out that while India has performed well recently, the US S&P 500 has consistently outpaced the Indian Nifty index over 1-year, 3-year, 5-year, and 15-year time frames. He explained that this comparison underlines the potential benefits of investing in global markets.
He added that India comprises only a small segment of the global market cap, making international diversification essential for reducing risks related to domestic volatility. According to Gang, investors should aim for a diversified portfolio, allocating around 10% to 20% to international markets through direct investments or mutual funds.
For the entire discussion, watch the accompanying video
First Published: Nov 1, 2024 6:50 PM IST
