Last Updated on July 28, 2021 at 8:02 am
In this article, we compare the performance of international equity mutual funds (based in India and available for the retail Indian investor) with the S&P 500 Total Return in INR over the last one, two and three years as of July 23rd 2021.
If we exclude the international index funds tracking the Nasdaq 100 and S& P 500 (we shall discuss their tracking errors in the next article), we have a total of 35 funds that are at least one year old and 33 funds which are at least 2/3 years old.
- Only 5 out of 35 funds outperformed the S&P 500 TR INR over the last year
- Only 8 out of 33 funds outperformed the S&P 500 TR INR over the last two years
- Only 5 out of 33 funds outperformed the S&P 500 TR INR over the last three years
However, some funds in this list are sector-specific (eg. DSP World Mining Fund, ABSL Agri Fund) or geography-specific (eg. funds investing in Euro, China, Brazil, emerging economies etc) and it would not be fair to compare them to the S&P 500.
If we eliminate them, we have a total of 19 funds that are at least one year old and 17 funds that are at least 2/3 years old.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
- Only 3 out of 19 funds outperformed the S&P 500 TR INR over the last year
- Only 6 out of 17 funds outperformed the S&P 500 TR INR over the last two years
- Only 4 out of 17 funds outperformed the S&P 500 TR INR over the last three years.
The full list is given below. The benchmark return is indicated in bold. The table is sorted in descending 3Y returns. Returns for the NASDAQ 100 TR INR (an appropriate benchmark for some funds like PGIM Global) is also indicated.
| Scheme Name | 1 Year | 2 Years | 3 Years |
| PGIM India Global Equity Opp Fund(G)-Direct Plan | 33.0 | 40.7 | 32.4 |
| Franklin India Feeder – Franklin U.S. Opportunities Fund(G)-Direct Plan | 37.1 | 36.0 | 26.6 |
| Nippon India US Equity Opp Fund(G)-Direct Plan | 35.9 | 27.8 | 22.9 |
| ICICI Pru US Bluechip Equity Fund(G)-Direct Plan | 36.7 | 28.6 | 22.6 |
| S&P 500 TRI INR (NASDAQ 100 TRI INR) | 37.8 (43.2) | 27.8 (43.9) | 21.3 (31.4) |
| DSP US Flexible Equity Fund(G)-Direct Plan | 36.1 | 28.0 | 19.0 |
| Aditya Birla SL Global Emerging Opp Fund(G)-Direct Plan | 29.6 | 27.9 | 16.3 |
| Sundaram Global Brand Fund(G)-Direct Plan | 34.6 | 24.1 | 15.8 |
| Principal Global Opportunities Fund(G)-Direct Plan | 44.2 | 26.5 | 15.1 |
| Aditya Birla SL Intl. Equity Fund-A(G)-Direct Plan | 25.4 | 20.0 | 14.9 |
| Edelweiss US Value Equity Offshore Fund(G)-Direct Plan | 36.3 | 20.5 | 14.8 |
| HSBC Global Emerging Markets Fund(G)-Direct Plan | 23.6 | 21.0 | 13.6 |
| DSP Global Allocation Fund(G)-Direct Plan | 18.6 | 19.6 | 13.5 |
| Aditya Birla SL Intl. Equity Fund-B(G)-Direct Plan | 53.7 | 22.7 | 13.4 |
| ICICI Pru Global Stable Equity Fund(FOF)(G)-Direct Plan | 26.3 | 17.5 | 12.9 |
| Kotak Global Emerging Mkt Fund(G)-Direct Plan | 26.6 | 21.5 | 12.5 |
| Invesco India Feeder – Invesco Global Equity Income Fund(G)-Direct Plan | 33.9 | 18.4 | 11.1 |
| Aditya Birla SL Global Excellence Equity FoF(G)-Direct Plan | 33.2 | 10.5 | 8.7 |
| Edelweiss US Technology Equity FOF-(G)-Direct Plan | 44.5 | ||
| ICICI Pru Global Advantage Fund(FOF)(G)-Direct Plan | 22.8 |
What does this mean for investors?
Investors should not rush to invest in the outperformers on this list! They are unlikely to keep that status for long! We have seen this happen again and again in our reviews:
- PGIM India Global Equity Opportunities Fund Review: Should You Invest?
- Mirae Asset NYSE FANG+ ETF and FOF Review
- ICICI Prudential US Bluechip Equity Fund Review
- Franklin India Feeder Franklin U.S. Opportunities Fund Review
- Axis Global Innovation Fund of Fund Review
- Axis Global Equity Alpha Fund of Fund Review: Should You Invest?
- Edelweiss US Technology Equity Fund of Fund: What you need to know
- Edelweiss Greater China Equity Off-shore Fund Review
- DSP US Flexible Equity Fund Review
Be it a fund of fund investing in a foreign actively managed fund (domiciled in Luxembourg!) or a locally managed active fund (eg. US Bluechip Equity), consistently beating the S&P 500 or the NASDAQ 100 is quite difficult.
On top of it, there is the TER chared for a fund of fund. It is nothing short of atrocious that the direct plan of the fund of fund charges an additional TER comparable to that of the underlying active fund. The regular plan charges an additional TER of about 2X of the underlying fund. So if the lack of performance does not result in less than benchmark returns, the expenses will ensure it.
Therefore investors seeking “international diversification” (in most cases this is just recency bias, not a portfolio management tactic) are better off with Motilal Oswal S&P 500 Index Fund (click the link to check what returns to expect). This fund remains the most reasonable option to invest in the US/international market (without the concentration risk and volatility of the Nasdaq 100 ETF or FOF from the same AMC). In the next article, we shall discuss the tracking error of both these passive investing options.
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 7000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 2,500 investors and advisors use this!
Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)