Non Resident Indians (NRIs) in the US face a typical problem when it comes to investing in mutual funds in India. Most mutual funds in India, which have their head-offices in the US cannot accept money from NRIs in the US.
Mathews India Fund
This fund invests almost 80 per cent in the Indian markets. The asset size by the end of Dec 2015 was close to $ 1.51 billion.
|Returns by the Mathews India Fund|
|1 year returns||3 year returns||5 year returns||10 year returns|
The risk for the fund include currency risk, volatility of stocks, particularly to emerging markets and volatility in some smaller stocks that the fund holds.
The fund has managed to generate positive returns in the last 1 year, despite the fact that Indian benchmark indices are down almost 9 per cent in the last one year.
Eaton Vance Greater India Fund
This fund invests primarily in India, though it has a mandate to also look at Pakistan and Sri Lanka. However, if you see the portfolio of top holdings it comprises mostly of Indian companies with names like ITC, HDFC Bank, HDFC, ICICI Bank and Yes Bank forming the top 5 of its portfolio.
|Here is a look at the returns from the Eaton Vance Greater India Fund|
|1 year||3 year||5 year||10 year|
Like most other India dedicated funds the risk remain the huge volatility in the emerging markets. The fund has not seen an exceptional performance in the last few years. In fact, the portfolio is heavily geared to the banking sector and any recovery in banking stocks in India, could give a boost to the fund.
Waswatch Emerging India Fund
The fund invests primarily in Indian companies to generate returns. The one year return of the fund has been close to 4.16 per cent, while the fund has generated near 9 per cent returns since inception.
|Returns From Waswatch Emerging India Fund|
|1 year return||Returns since inception|
The Fund is managed by Ajay Krishnan. NRIs should remember that investing in emerging markets like India, through India dedicated funds, could pose currency and volatility risks, as these markets are slightly more volatile than developed markets.
Another thing to remember about this fund is that it invests in small and mid sized companies, where the volatility, that is price movement either ways is much more sharper.
The holding is not spread, which could be a further risk. Wawsatch Funds deducts a 2 per cent for redemption proceeds, if you redeem within 6 months.
India dedicated funds for NRIs in the US is one option that they can consider. There are many such funds, which we are not able to highlight all. The above is not a recommendation to invest, but just an informative article.
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