While the depreciating Indian Rupee has helped overseas fund of funds post decent returns at a time when the Sensex and the equity diversified category have lagged, Swapnil Suvarna advises you to recommend these funds only if they have fit in to the broad asset allocation for your clients.
The overseas or international fund of funds are those funds that invest in international equity fund of any foreign country through their local currency. This category has over the past five and three years marginally outperformed the equity diversified category. In the last one year, the category has declined merely by 3 percent whereas the Sensex and the equity diversified category have plunged over 19 percent each thanks to the depreciating Indian rupee.
The net asset value (NAV) of these domestic overseas fund of funds alter due to the impact of any currency movement, even though the investment value of the foreign investment remains unchanged in terms of local currency.
NAV Return (%) 5 Years 3 Years 1 Year 6 Months 3 Months 1 Month Overseas FoF Average 4.52 21.24 (3.00) (1.24) 5.37 (0.68) Sensex 3.32 17.90 (19.79) (13.26) (4.96) (7.23) Large-cap Average 4.55 18.18 (19.47) (13.38) (5.88) (6.89) Mid-cap Average 3.97 26.02 (20.01) (15.30) (10.26) (8.49) Multi-cap Average 5.16 19.93 (19.78) (13.94) (7.04) (7.35) Small-cap Average (0.99) 19.74 (26.35) (18.94) (12.19) (9.83) Equity Div Average 4.51 20.82 (19.98) (14.23)
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