Mutual funds are lining up to tap investors' appetite for global markets with schemes aimed at investing in other countries, which they claim would act as a hedge against any fall in the domestic markets. While DSP Merrill Lynch and Kotak MF launched their global funds last week, UTI MF and HSBC Asset Management Company are also planning to launch new schemes for overseas investments. Market observers say despite significant gains in the domestic market, there have been bouts of volatility, and a diversified portfolio spread across boundaries could be the best bet for investors. This also helps to reduce overall investment risk as a decline in one market could often be offset by a rise in another, they added. "Investment in the overseas markets provides a hedging mechanism for investors to tide over the slump in the domestic market," Anup Maheshwari, head (equities), DSP Merrill Lynch Fund Managers said.The trend of launching global funds has gained momentum after Reserve Bank of India eased norms for mutual funds' investment in international markets. As per the current guidelines, mutual funds can invest up to $4 billion in the overseas market.
