The world’s biggest companies, listed on S&P 500 in the USA, collectively referred as the “Magnificent Seven” tech giants (Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Broadcom) now have a combined market capitalization that exceeds the GDP of several major economies. Want exposure to that kind of global growth? As an investor, who doesn’t want to own a piece of these global powerhouses.
How Indians Can Invest Globally?
- LRS Route: Invest directly in US stocks and ETFs via international brokers
- International Mutual Funds: Indian AMCs that offer exposure to global equities
- GIFT City Funds: India-based funds with global exposure for HNIs
🧾 Tax, currency risk, and regulatory limits apply.
As resident Indians, one can invest in international markets:
• Directly via Stockbroker: Invest directly in foreign stocks, ETFs or foreign mutual funds via Liberalised Remittance Scheme (LRS) route by converting rupee to foreign currency
• International Mutual Funds: Invest in schemes from Indian AMCs that put money in overseas markets directly or through a feeder fund/fund of fund that mirrors an international mutual fund or index
Directly via Stockbroker
When investing directly via LRS route (RBI limit of $2,50,000/year as on today), an investor needs to open a stock trading account either directly with an overseas broker or Indian broker offering overseas investing services. The responsibility of deciding on which stocks to invest, when to buy and sell, etc. lies with the investor. One can also invest directly in foreign ETFs/Mutual Fund through this facility. Investor needs to convert Indian rupee to dollar (or other foreign currency) when investing via this route. Investors also carry short-term currency fluctuation risks. Also, as per present tax laws, any outward remittance above ₹ 10 lakh in a financial year will attract TCS (tax collected at source) of 20%. Apart from this, the investor needs to take care of the statutory reporting or tax compliance (including overseas taxes, if any) while investing directly in overseas stock markets.
International Mutual Funds
International mutual funds offer access to global companies that don’t feature on Indian stock exchanges. International funds are Indian mutual fund schemes that invest in overseas markets, giving investors exposure to companies like Apple, Microsoft, Tesla, Meta, Nvidia and more — sectors & businesses shaping global innovation and consumption.
International Mutual Funds may invest:
• Directly in stocks of international companies
• Through feeder funds that mirror a global index or invests in a global fund which already invests in the stocks of foreign companies
• Specific geographies or global themes
Why should investors consider International Mutual Funds?
• Diversification across geographies and economies (like the US, Europe, or emerging markets)
• Access to global sectors (like technology, healthcare, or semiconductors)
• Invest in big global brands not available for investing in India like Apple, Tesla, Meta, Nvidia
• Potential to participate in the long-term growth of global brands
Who should invest in International Mutual Funds?
Investors with a well-diversified Indian portfolio looking for global exposure can consider investing in international mutual funds. If the core asset allocation is in place and the investor’s goals are long-term, international funds can be a meaningful addition. Ideally, around 10% of the overall financial portfolio can be invested in international funds but this can vary depending on an investor’s overall financial portfolio.
But here’s what to be mindful of:
• The RBI has set a limit on how much Indian MFs can invest overseas (in dollar terms) – As this limit is exhausted, most AMCs have temporarily paused fresh investments and ceased existing SIPs too
• Volatility and currency risk can impact NAVs, even if you’re investing in INR
• The withdrawal takes a little longer than the regular equity funds (4-5 days) and needs to be planned accordingly
• Investors need to be cognizant about the tax liability of these funds as they do not suffer STT (Securities Transaction Tax)
• There may be temporary restrictions on additional investments due to regulatory updates
GIFT City Funds
Apart from these two ways, investors can also invest via the GIFT City Fund that offers exposure to overseas companies, providing another route for global diversification. Like direct stocks, GIFT City Fund accepts investments under the LRS route. However, the minimum ticket size makes this option more suitable for the high net-worth investors.
Final Word
Assuming you are an affluent investor, if the feeling – ‘I too own these stocks’ gives you a wow factor, it’s a different thing. But at present valuation, it is unclear as to how much ROI they can bring to your portfolio (even though there is still good potential in all these global brands). And if you are a retail investor investing with the primary objective of achieving your core financial goals, you may not miss out significantly by not investing in overseas theme. However, these funds can be a small part of your overall portfolio considering a long-term horizon (8-10 years).
Investing in global brands can be exciting — especially when their products are part of our daily lives. But don’t let familiarity or hype drive your decisions. Global funds are not a substitute for your core Indian equity portfolio. Make sure your overall investment plan is solid and then go global — with a purpose.
Shreedhara is the Founder & Director of Ara Financial Services Pvt. Ltd. He has an experience of over 2 decades in Financial Service Industry with majority of it in guiding individuals and institutions on their investments requirements.
