International Fund
A fund giving Indian investors exposure to securities listed outside India.
Formula
Return in Rupees = (1 + Foreign Market Return) x (1 + Currency Change) - 1
Unit
%
In depth
International funds add geographic diversification and currency exposure, and the currency component has historically helped Indian investors because the rupee has tended to depreciate. Their practical constraint is regulatory: the industry-wide overseas investment limit set by the Reserve Bank has been exhausted more than once, forcing funds to stop accepting money and pushing the corresponding ETFs to large premiums. Taxation has changed repeatedly and now generally follows the non-equity rules, so the applicable treatment should be checked rather than assumed. Buying an international ETF at a premium is the most common way investors lose money in this category without the underlying falling.
Worked example
A foreign index returns 9% while the rupee weakens 4%. The rupee return is 1.09 x 1.04 - 1 = 13.4%. Buying the corresponding ETF at a 12% premium would have consumed most of that.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “International Fund” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.