US funds face near-term headwinds from a range of global concerns: Experts

US funds, which have generated robust returns year-to-date, have slipped on the performance scorecard over the last one month. US funds have given negative returns of close to 2 per cent in one month. In the same period, large-cap, mid-cap, and small-cap schemes have generated around 5 per cent of returns.

According to experts, US funds have been facing near-term headwinds from a range of global concerns. "The US-China trade tensions, the impeachment inquiry against US President Donald Trump and the attack on oil facilities in Saudi Arabia have been some of the recent concerns," said Rajiv Thakkar, chief investment officer of PPFAS Mutual Fund. Further, Brexit and the run-up to US elections in 2020 can add to global uncertainties. On the other hand, sentiments have improved on the domestic front following the tax cuts introduced by Finance Minister Nirmala Sitharaman. Experts say diversification through international funds is an important allocation strategy to deal with market volatility. “At different points, different markets tend to do well. Such diversification helps in bringing down volatility and one also gets exposure to companies and businesses that are not listed in India,” Thakkar added.