GEM GAZE

April 2011

An Additional Avenue…

For the average Indian investor, international avenues are still a relatively unexplored territory. However, the easing of overseas investment norms for mutual funds has made it possible for you to participate in international markets and add a foreign flavour to your portfolio. A variety of globally focused funds are available, which not only invest in equities but also participate in other asset classes like gold, real estate, and commodities. Besides this, there are global funds concentrating on certain key markets like China, Latin America, and other emerging markets. Many of the funds use the 'fund of funds' route for investing abroad, by investing in a global fund of the parent fund house abroad. Some even invest directly in international stocks. Presently, there are around 28 funds that invest in global markets.

The glittering GEMs from among these global funds that are worthy of adorning your portfolio have been handpicked and presented in the April 2011 GEMGAZE.

Principal Global opportunities Fund Gem

The first global fund to be launched in India in March 2004, Principal Global Opportunities Fund, has an AUM of Rs 49.19 crore at present. This feeder fund, which invests almost the entire corpus in Principal Global Investors – Emerging Market Equity, earned a one-year return of 16.23%, almost on par with the category average of 16.81%. The expense ratio is 0.42% and the portfolio turnover ratio is 10%.

Templeton India Equity Income Fund Gem

Next in line and the largest global fund with an AUM of Rs 1135.07 crore is Templeton India Equity Income Fund, launched in April 2006. 98.19% of the fund is in equity with a mere 28% in foreign equity. Large caps constitute 49% of the portfolio. 53% of the assets are in the top three sectors – finance, metals, and energy. The one-year return of 13.44% surpasses the category average of 8.59% by a huge margin. While the expense ratio is quite high at 2.02%, the portfolio turnover ratio is only 2.81%.

Fidelity International Opportunities Fund Gem

Launched in April 2007, Fidelity International Opportunities Fund sports an AUM of Rs 421.51 crore. With 99.26% in equity, foreign equity is a paltry 16%. 62% of the assets are in large cap stocks. The top three sectors - finance, metals, and energy - constitute 58.17% of the portfolio. The one-year return of 13.7% is well above the category average of 8.6%. The expense ratio at 2.22% and the portfolio turnover ratio of 50% are on the higher side.

DWS Global Thematic Offshore Fund

DWS Global Thematic Offshore Fund, launched in August 2007, has an AUM of Rs 31.65 crore. It is a feeder fund investing the entire corpus in DWS Invest Global Thematic Fund. The one-year return has been lacklustre at 10.19% as against the category average of 16.72%. The expense ratio has risen to 1.6%.

Sundaram Global Advantage Fund Gem

Launched in July 2007, Sundaram Global Advantage Fund has an AUM of Rs. 70.58 crore. 93.36% of the portfolio is in foreign equity and the rest in cash. The one-year return at 14.32% is a tad less than the category average of 16.72%. The expense ratio at 0.75% is reasonable.

ICICI Prudential Indo Asia Equity Fund Gem

ICICI Prudential Indo Asia Equity Fund, with an AUM of Rs 239.66 crore, was launched in September 2007. The fund invests 93.53% of the corpus in equity out of which 32% is in IOF Asian Equity Fund. 89% of the assets are in large caps. 65.95% of the portfolio is in the top three sectors – finance, energy, and technology. The fund has posted an impressive 11.69% in the past one-year as against the category average of 8.2%. The expense ratio of 2.36% and the portfolio turnover ratio of 92% are on the higher side.

Mirae Asset Global Commodity Stocks Fund Gem

The latest entrant of the lot, Mirae Asset Global Commodity Stocks Fund, was launched in July 2008. The AUM at present is Rs 43.14 crore. Of the 96.71% of the corpus in equity, 70% is in foreign equity. Large cap stocks constitute 89% of the portfolio. 65.14% of the portfolio is in the top three sectors – energy, metals and construction. The fund has posted a not so impressive 11.71% in the past one-year as against the category average of 16.72%. The expense ratio of 2.5% and the portfolio turnover ratio of 50% are on the higher side.