Tipping point: Stick to US-focused funds despite volatility

US-focused funds are the first category of international funds that financial advisors suggest to Indian investors looking for geographic diversification. These funds have also performed well for the past several years. However, now there are fears of global growth slowing down. There is a possibility that these funds could see some turbulence in the near future.

Investors should not think of exiting them despite higher volatility. They provide global diversification, as most of the stocks held by these funds are multinationals that derive their earnings from across the globe. They also provide protection to Indian investors from the impact of long-term rupee depreciation against hard currencies. These funds hold stocks belonging to sectors to which investors cannot get exposure on the local bourses.