Which funds hold foreign equity like Parag Parikh Flexi Cap Fund?

Published: December 22, 2021 at 7:00 am

A reader asks, “I am looking for equity funds that hold foreign stocks (overseas equity) but also hold 65% of Indian equity similar to Parag Parikh Flexi Cap Fund so that it will be taxed as an “equity fund”. Can you help?”

The advantage of holding such funds compared to a Nasdaq 100 or S&P 500 index fund is that the fund manager will handle the rebalancing between Indian and foreign stocks with no tax outgo on our side. The tax on redemption will also be lower since these Index funds or an international fund of funds will be taxed as a “non-equity” fund. For a since NFO investor account in Parag Parikh Flexicap, see Portfolio Audit 2021: How my goal-based investments fared this year.

The disadvantages are fund manager risk and popularity risk like, for instance, with Parag Parikh Flexicap. For investors with reasonable expectations who do not worry about “star ratings”, this is a reasonable risk to take since there are currently no passive options.

How to interpret this list: Funds holding overseas equity and 65% of Indian equity (as of Nov 31st 2021) are listed below. The numbers shown can vary considerably from month to month. The tax status of some funds can also vary from equity to “non-equity”.

Therfore the reader should be aware that the numbers below indicate that the fund “can hold overseas equity”. They should then consult individual scheme information documents to learn the range of permissible international equity.


Some of these funds hold overseas mutual fund units. The weights below are the sum of overseas direct equity and overseas mutual fund units (when applicable).

List of Indian Equity Funds holding International Equity

The numbers are as of Nov 30 2021. None of the funds listed below are investment recommendations.  We could identify a total of 38 such funds.

CategoryFundOverseas Equities%
ValueDSP Value Fund31.83
FlexicapParag Parikh Flexi Cap Fund30.36
Thematic MiscAxis ESG Equity Fund27.03
Technology FundsFranklin India Technology Fund26.72
Thematic MiscAxis Special Situations Fund24.9
Energy and powerDSP Natural Res & New Energy Fund23.73
Large and MidcapAxis Growth Opp Fund23.53
Technology FundsSBI Technology Opp Fund23.04
MNCICICI Pru MNC Fund20.47
Multi-assetNippon India Multi-Asset Fund19.78
Thematic MiscKotak Pioneer Fund18.2
ConsumptionICICI Pru FMCG Fund16.56
FocusedSBI Focused Equity Fund15.13
large CapPrincipal Large Cap Fund13.96
MNCSBI Magnum Global Fund13.28
Aggressive hybridPGIM India Hybrid Equity Fund11.22
Dividend YieldAditya Birla SL Dividend Yield Fund10.71
Technology FundsICICI Pru Technology Fund10.38
Pharma and HealthcareDSP Healthcare Fund10.23
Dividend YieldTempleton India Equity Income Fund8.07
Thematic MiscICICI Pru ESG Fund7.22
Service IndustryICICI Pru Exports & Services Fund6.49
Thematic MiscSBI Magnum Equity ESG Fund6.15
Thematic MiscICICI Pru Business Cycle Fund5.92
ValueICICI Pru Value Discovery Fund5.43
Thematic MiscTata Digital India Fund5.29
ContraSBI Contra Fund4.74
Thematic MiscAditya Birla SL Digital India Fund4.63
Thematic MiscAditya Birla SL Digital India Fund4.63
FlexicapSBI Flexicap Fund4.31
Dividend YieldICICI Pru Dividend Yield Equity Fund3.82
ConsumptionSBI Consumption Opp Fund2.27
Multi-assetSBI Multi-Asset Allocation Fund1.82
Balanced AdvantageSBI Balanced Advantage Fund1.38
Large and MidcapFranklin India Equity Advantage Fund1.34
large CapICICI Pru Bluechip Fund0.55
Service IndustrySundaram Services Fund0.37

We recommend that investors not buy any fund only for its overseas equity investments. They should ensure if the fund category is suitable for their need and further investigate a particular funds investment strategy before investing.

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Pattabiraman editor freefincalDr 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 nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or 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 to promote unbiased, commission-free investment advice.
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