Indian funds eye global exposure

Put some money in schemes that invest abroad, fund managers urge, in our annual issue. 

India has been one of the best-performing markets in the world in recent times. At 19,243, the BSE Sensex has posted a return of 51.5 per cent over the last one year.

Given that the Indian economy should remain the second-fastest growing economy in the world for several years to come, there is little reason for the stock market not to do well.

However, it's also true that there have been other markets in the region that have done better. For instance, over the past one year Hong Kong's Hang Seng index has gained 65.66 per cent while the Indonesian market has risen 66.86 per cent.

Fund managers believe it does not hurt to get a share of the spoils. That is why they are asking investors to put some of their money into schemes that invest in markets abroad. Now that the government has upped the limit for investing overseas to $5 billion, mutual funds believe it is worth a shot.

In the last month, at least half a dozen fund houses have come up with schemes that plan to put either a part of the corpus or the entire amount in markets abroad. Most have preferred to invest a smaller proportion of 35 per cent overseas because it works out more tax-friendly for Indian investors.

Some plan to buy into stocks directly with the help of research firms, others have opted to simply park the money in a fund that already exists in the belief that it is simpler and more efficient, though not necessarily less expensive.

Read all about this new trend in the Business Standard Fund Manager, the annual issue on the mutual fund industry, distributed free with today's edition of Business Standard.

Also, a four-member jury decided on the winners of Fund Managers of the Year 2006-7. The winner in the equities category is Sandeep Kothari of Fidelity, while the winner in the debt category is Suyash Choudhary of Standard Chartered AMC.

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CLICK HERE FOR 2006 COVERAGE OF FUND MANAGER