Mutual Funds

Global funds outperform domestic counterparts

Yoganand D | Updated on January 05, 2020 Published on January 05, 2020

The US market was the highlight among global markets in 2019, amid the US-China trade war.

The Dow Jones Industrial Average gained 23 per cent and the S&P 500 jumped 29 per cent during the year.

The Nasdaq Composite also clocked an extraordinary gain, jumping 35 per cent.

The factors that boosted the markets are a strong rally in tech sector stocks, US Federal Reserve rate cuts and positive economic data. Gold, the safe-haven asset also surged 19 per cent, its best performance in recent years.



The final stretch of the rally was boosted by easing uncertainties on the US-China trade war and clarity on Brexit. Other markets such as the Shanghai Composite posted 22 per cent gains and the Nikkei 225 index surged 18 per cent in 2019.

Global vs domestic markets

Those who diversified investments and put their money in global markets through the mutual fund route reaped extraordinary returns in the past year, whereas in the domestic equity market, the Nifty delivered 12 per cent and the Sensex climbed 14 per cent in 2019.

Here, we look at the one-year performance of international funds available and the themes that worked for investors.

Global funds invest in global indices, commodities and commodity companies, real estate and emerging markets.

A weakening rupee against the dollar due to the US-China trade war bolstered returns of global funds. Moreover, the dollar index gained 1.4 per cent against other major currencies. Edelweiss GCE Off-Shore and Kotak World Gold clocked the highest gain of 45.7 per cent and 41.2 per cent, respectively.

DSP World Gold and Franklin India Feeder - Franklin US Opportunities are the other top-performing funds, with 35 per cent and 34 per cent returns, respectively. A strong rally by the yellow metal and extraordinary gains by US tech stocks boosted these funds. On the other hand, some international funds delivered lower returns of 12-17 per cent.

These are Invesco India Feeder - Invesco PEE, Franklin India Feeder - FEG and Edelweiss ASEAN Equity Off-shore.

Edelweiss GCE Off-Shore and Franklin India Feeder - Franklin US Opportunities have delivered about 19 per cent each, over the past three-year period.

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Published on January 05, 2020
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