Should you invest in international funds? Take exposure to developed mkts

Reduce home-country risk with international funds and give the portfolio a dash of diversification

With a return of 6.88 per cent, international funds have been the best-performing category among mutual funds over the past three months, according to data from Value Research. The average return over the past one year has also been high at 16 per cent. A high level of liquidity internationally, low-interest rates in the developed world and the on-going global economic recovery have contributed to the robust performance of equities globally.

With valuations in the Indian markets at high levels and earnings recovery getting delayed, investors should diversify their portfolios by investing in international funds.

An investor can