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Investors have been pumping in money in these funds whenever there is a steep fall in global markets. Â
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REUTERS
In the midst of the tariff trade war unleashed by US President Donald Trump, China-focused mutual fund schemes have delivered good returns while those with exposure to the US stocks and other regions continue to bear the brunt of the volatile movements in the underlying.
China-focused Mirae Asset Hang Seng Tech ETF Fund of Funds has been a clear winner and delivered 74 per cent return in the last one year even as the US levied a whopping 145 per cent tariff on imports from China. Amid the growing trade war, the Chinese stock market was boosted by increased fund flow from foreign investors who took advantage of the cheap valuations of high-tech Chinese companies.
Given the strong rally in gold prices, DSP World Gold Fund of Fund gave a return of 62 per cent – much higher than all the other foreign-focused mutual fund schemes, according to Fisdom Research data.
The remaining foreign funds have managed to deliver below 20 per cent with the third-best US-focused Motilal Oswal Nasdaq 100 and Mirae Asset NYSE FANG+ ETF FoF returning 19 per cent and 18 per cent, respectively.
Bluechip funds among worst hit
The thematic global funds based on innovation, clean technology and bluechip funds were the worst hit. In the last one year, DSP Global Clean Energy FoF and Mirae Asset Global Electric & Autonomous Vehicles ETFs FoF delivered a negative return of 9 per cent and 7 per cent, respectively, while return from Nippon India Taiwan Equity Fund was a negative 6 per cent.
In 2022, SEBI directed fund houses to stop investing in overseas market as the industry was closer to the $7 billion limit set by the RBI. After the fall in global equity markets, SEBI allowed fresh investments within the limit available for each individual fund house. The industry has a separate limit of $1 billion for investment in overseas ETFs.
In the last one year, overseas funds’ AUM has increased just two per cent last month to ₹25,031 crore against ₹24,591 crore logged in April, 2024, amid a steady outflow. Investors have been pumping in money in these funds whenever there is a steep fall in global markets.
India well positioned
Vivek Sharma, VP & Investments Head at Estee Advisors said the performance of the S&P 500 has been largely driven by a handful of these leading companies. Over the past decade, global giants such as Apple, Google, and Facebook have seen remarkable growth, with their combined market capitalisation now surpassing the GDP of entire nations, including India, he added.
Nirav Karkera, Head of Research at Fisdom said India remains relatively well positioned amid the current tariff tantrum.
Macro disruptions could open up opportunities through price distortion in select counters listed on US bourses, while global commodities remain in spotlight with a positive bias, he said.
Published on April 30, 2025
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