Is it the time for Indian investors to invest in the Global Market?

Indian investors are risk-averse as they possess a tendency to invest in low-risk securities with an expectation of getting higher returns & that too within a short period. Observing the change of trend in the investor’s behavior, investments in mutual funds have witnessed an upward growth over the last 3 years which claims that the campaign of “Mutual Fund Sahi Hain” promoted by the Govt. to increase awareness about the same had proven to be beneficial, generating positive outcomes.

Currently, the world is dealing with the COVID19 pandemic which has created a global economic crisis affecting all the organizations across the globe irrespective of their capacity. With the decision of removing the lockdown by the Indian Government and the reopening of organizations for resuming their operations, the market has again started witnessing growth. Studies of financial experts suggest that the equity market has a nature to improve before the economy starts recovering. With easily available options of investments such as Systematic Investment Planning (SIP), it is always the right time for experienced investors & even for the newcomers to start investing for a long period to fulfill their long-term goals.

With around 5000 companies listed in the exchange, India accounts for only around 2% - 3% of the world’s total capitalization. India currently has a steady competition with China in terms of emerging economies of the world and both the countries share head-to-head market statistics. While the risk percentage of the Chinese market is around 24.7%, it is around 22.3% for the Indian market. But here lies the biggest question for the Indian market i.e. whether the Indian investors are having an intention of going global by investing in International Funds or not.

International Funds are the mutual funds whose investment portfolio majorly consists of the organizations located anywhere on the globe. Investments made in these funds has its advantage of providing proper exposure to the capital for growth and also an opportunity to get the geographical diversification. These funds have the capability of providing positive returns according to the market trends and a long-term investment makes the volatility of risk low in these funds due to the international portfolio. As days are passing by, investors are becoming aware of the international market scenario resulting in the need for diversification of the portfolio.

Big international organizations like Alphabet, Facebook under the sector of Consumer Internet, Amazon, Alibaba under E-Commerce, Global brands like Adidas, Nestle and Visa, Mastercard under the sector of Payments with their strategies of diversification and their ability to adapt changes according to the rapidly changing global environment are clear winners and have the potentiality to generate maximum gains for the investors.

Disclaimer: Views expressed are personal by Amit Kumar Roy