Buy into international funds when Indian equity returns run dry

Apart from sustaining your portfolio when the domestic market is faring well, global diversification also safeguards it against currency risk

At a time when the trailing three-month return for most equity fund categories have turned negative, one category that is still in the positive is international funds (return 4.22 per cent; source: Value Research), underlining the ability of these funds to act as portfolio diversifiers. 

Like most investors globally, Indian investors too have a home bias. The bulk of their portfolio is invested in India and they are often reluctant to invest abroad. The home bias tends to get more pronounced when the Indian markets are doing well. According to experts, however, having a 10-20 per cent (of the equity