As Indian investors get more experienced, they understand that markets have cycles and not all cycles are synchronized – which makes the case for diversification across markets.
Added to this is the fact that there are some important cutting edge global sectors that are not well represented in Indian markets. Further, the merits of currency diversification cannot be overemphasized.
HDFC MF’s first two Gifty city funds for Indian investors wanting global exposure cater to this growing need for global diversification – especially at a time when domestic MFs’ overseas investments remain capped.
Gifty City funds investing overseas offer Indian investors a familiar way to invest in unfamiliar markets. Investor onboarding, the investment process, known RTAs – all of these make this route a lot easier than opening offshore accounts and investing directly offshore.
Taxation is another big advantage – for Gift City funds, taxation is at the fund level – very similar to Cat III AIFs. That said, Manas urges investors to consult their tax consultants on this aspect while filing returns.
The two funds on the shelf currently include a feeder into a passive fund that gives exposure to developed markets while the other is a feeder into a passive fund focused on emerging markets. These are retail funds with minimum investment of $5000 and subsequent top-ups at a minimum of$500.
Both funds currently are very tech heavy – given the huge flows into AI plays across the globe. While these give Indian investors sizeable exposure to AI which we don’t get locally, Manas cautions that over time, as sector rotation cycles play out, weights will also fluctuate.
Both are richly diversified with over 1000 stocks in each covering all key geographies in their respective domains.
Product expansion plans can include some actively managed funds in addition to broadening the range of passives.