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Category Archives: Global Mutual Funds

June 18, 2021

Are you a financial professional, real estate broker, chartered accountant, lawyer, estate planner or such other professional providing services to HNIs and Ultra HNIs?

Do you wish to avail of a new earning opportunity?

It would be interesting for you to know that Indian HNIS remitted more than $4 billion US for their children’s education US last year, the overall remittance by HNIs being $14 billion US.

Most of your clients may be asking you –

  • How can they save on foreign education fees?
  • How can they invest in international property and create a global real estate portfolio?
  • How can they expand their business globally?
  • How can they procure a second passport and travel visa-free or obtain a visa on arrival to a maximum number of countries?
  • How can they enjoy a good quality of life by retiring abroad?
  • How can they obtain NRI status?
  • How can they structure their investment globally to make it tax efficient?

Does this sound familiar?

Do you wish to have answers to all these questions?

Then join Ajmera Law Group (ALG) – Global Investment Advisors, as an Associate and let us help you serve your clients in the best possible manner.

June 2, 2021


There has been a paradigm shift in the mindsets of people that have existed for centuries which has switched dramatically. As record-high inflation rates have surpassed, lifestyles that have been built over decades can no longer be sustained by the current existing income levels. Investors today are weighing their alternatives to building a luxurious and comforting lifestyle

Todays’ twenty-first-century Investor is well versed and cognizant about the functioning and performances of markets around the globe. Geographic blockades no longer seem to be a hindrance for pursuing contemporary and advanced investment prospects and for generating exceptional returns for the investors. Investors are now switching to Global Funds, which enables and permits them not only to expand but also diversify their portfolio and invest globally

A Global Mutual fund is one that invests in businesses all over the world, including those in the investor’s home country. It aims to find the best investments for the investor from a large pool of securities around the world. A global fund can be either engaged in a single asset class or can be spread over many.

Structure of Global Mutual Funds

  • Direct Investment

There are assets that are managed directly by a local fund manager. Rather than relying on an offshore investment manager, the local fund manager ensures that your portfolio is well-managed and orchestrated

  • Indirect Investment   

They are referred to as Feeder Funds which pool money from local investors and then transfer the corpus to the parent fund, which is administered offshore, OR pure fund of funds, which invest the investor’s money in a portfolio of offshore funds,

  • Mix Investment (Foreign + Domestic)

These funds have a mix of both domestic and international mutual funds. As a result, they are a safer option for moderate risk-takers because they have reduced exposure to global equities while keeping an emphasis on the domestic market, which improves and enhances the tax efficiency of the portfolio.

  • Specific Region Investment

While selecting the Global Mutual Funds, the investor can invest in a specific country or region of her/his choice. The Investor needs a thorough understanding of the region/country she/he chooses to analyze the growth potential, returns, and exit at the appropriate time

These funds are more versatile because they are not limited and restricted to a specific region or country and it can provide investors with a more diversified exposure. These are usually managed by Fund managers, who have the requisite skills and proficiency in managing an investor’s portfolio and can identify and analyze prospects from all different parts of the world

  • Specific Theme Investment

These funds invest globally in particular themes or growth prospects. The Investor may invest in minerals, oil, gold, agriculture, mines, and other diverse themes or sectors. These funds are perfect to invest in during a growth cycle because they give investors access to segments that aren’t present in the domestic market. But the Investor must make that their portfolio isn’t overburdened by these types of assets, as limited exposure to a single theme will put investors at risk

Why Invest in Global Mutual Funds?

Diversification and Growth

It helps the investor to spread their Investment Portfolios among various foreign companies, markets, and securities in addition to their home country’s, as Global Mutual Funds invest into a wide range of securities in different parts of the world in different industries giving the Investors’ diversification in multi-folds (geographical, currency, industry). As a result, the risks that the volatility of a single security or the uncertainty in a single country or currency would have an adverse impact on the portfolio’s overall performance are reduced.

Hedge against Currency 

When we look at the rupee’s pattern in relation to the dollar, It is evident that it has just declined greatly. The Indian rupee which was worth Rs. 45 in 2000, is now worth Rs. 75. There are a variety of reasons for this depreciation, varying from global turbulence to growing inflation to venal bureaucracy to poor fiscal policies. Today, Investing in Global funds will help you take advantage of the rupee’s depreciation. By investing in rupees, you gain exposure to foreign exchange as you invest in these global funds. Any increase in the value of the foreign currency, as well as any decrease in the value of the domestic currency, would increase the investor’s returns. Since they offer a hedge against currency fluctuations, they must be included in the Investor’s Portfolio


For tax purposes, all mutual funds that invest in global markets are referred to as Non-Equity funds. As a result, Tax levied on Global Funds are in the following manner:

– The Investor sells the units within three years of the time when she/he bought them, the gains are credited to her/his taxable income and charged according to the slab rate. (Short Term Capital Gains)

The Investor sell the units after three years from the date of acquisition, the gains are levied at a rate of 20%, and indexation advantages (Long Term Capital Gains)


Investors should treat global mutual funds as a tactical allocation and keep a close eye on them while they are investing in the same, as the returns from these funds are not necessarily in line with those from Indian Mutual funds. Effectively, once the investor invests in those accounts, be mindful of both the advantages and disadvantages. Begin with small investments to get a better understanding of how those investments function before committing to larger investments in a foreign mutual fund. Invest only after you’ve developed a well-diversified exposure to mutual fund investments in India, and give yourself 5-7 years to do so.

This article is contributed by: Ms. Dishita Sheth, Intern at Ajmera Law Group 




June 1, 2021

The investor considers the products and services that they use daily. It could be anything ranging from shopping on Amazon to streaming movies on OTT platforms like Netflix to the most common, searching for things on Google. Many of these businesses are based outside of India and do not trade on Indian stock exchanges. Why should the 21st Century Investor invest in such global giants?

In the early 1960s, the advantages of foreign diversification were empirically illustrated in financial literature. A few empirical studies have shown that Investors may reduce the chance of their portfolio returns at a significant level of projected return by diversifying through countries whose business cycles were not ideally aligned. We are all well aware that the top Multinationals, Best performing, and High yielding companies also change regularly.

As a result, concentrating all of one’s savings in a single area or asset class is not an effective idea. Another perspective is to profit from the weakening currency. As a result, having a geographically diversified portfolio is a Smart and Sound strategy.

Strategic investment is a craft, and as investors become more knowledgeable of the benefits of equity investing, they are increasingly looking to invest in businesses headquartered in other countries. With most countries’ economies improving, Indian institutional investors are diversifying and broadening their investment horizons to benefit from massive returns on global stock markets.



This is most likely the most effective and relatively simpler way for investors to gain foreign exposure at a low-cost option. Many Indian fund houses offer such overseas equity investment schemes. For example, a well-known fund house provides index funds that monitor and tracks Nasdaq 100 indices in the United States. Their taxation is almost the same as that of debt funds in India, which means that someone who retains for more than three years is taxed at 20% with indexation.

Few investors may be resistant to global diversification, believing that today’s world is so intertwined that foreign investments may overlap domestic ones. However, this is not the case, since businesses prefer to behave in ways that are dictated by the situation in their home country. They are more likely to respond to local economic and geopolitical issues than to events occurring beyond their boundaries.


Investors can do so by sending money abroad via the Reserve Bank of India’s Liberalized Remittance Scheme (LRS), which has an annual cap of $250,000 (Approx. 1.8 Cr). The LRS cap expands the range of stocks and funds available to an investor beyond the small selection offered by Indian MUTUAL FUNDs. Transferring capital overseas, on the other hand, is costly as it requires more paperwork, and makes tax filing more difficult for Indian investors.

Besides that, foreign investment takes place in the shadow of official disapproval, particularly when done via the LRS pathway. Aside from the newly implemented TCS, foreign contributions must be registered annually under Schedule FA of the Income Tax returns, and omissions will result in the investor is subject to India’s strict black money laws.

Furthermore, foreign nations such as the United States collect their withholding taxes on dividends, which must be demanded back from India under the Double Taxation Avoidance Treaty (DTAA), which adds an extra layer of paperwork to the process 


Global diversification is a well-known investment strategy. It encapsulates the notion that a global portfolio is best secured against country-specific threats like economic recession or political unrest. Investors will also share in the gains of multinational corporations through global earnings.

International securities may provide significant diversification, improving the estimated risk-return profile of a total portfolio as compared to a portfolio that only contains Indian equities. This advantage stems from buying shares in several countries, each of which reacts to market and economic conditions differently

Investors can diversify their portfolios by owning shares denominated in a variety of currencies, each of which behaves differently from the underlying stock price. Different economies and currencies respond to business cycles and global developments in their distinct ways. Investors can reduce total portfolio uncertainty by using these offsetting trends, resulting in a smoother ride with comparable returns as compared to investing solely in Indian Stocks

Depending on whether it is measured in dollars or purchasing power parity, India’s share of the global economy ranges from 3 to 8%. As a result, taking part in the rise of the remaining 92-97 percent of the planet is a clear gain. The United States is a desirable destination.

Apple, Alphabet, Dell, IBM, Procter & Gamble, Facebook, and other global technology giants are listed on the New York Stock Exchange. The rupee’s depreciation against the dollar is another major factor for Indian investors to engage in foreign investment

International securities are viewed as unlisted stocks and are thus taxed at 20% of indexation on retention periods of more than two years. Gains in them are charged at a slab rate on shorter retention times.

To conclude, it is beneficial for investors to diversify internationally, and foreign diversification aids in risk management and portfolio planning for long-term development.

This article is contributed by: Ms. Dishita Sheth, Intern at Ajmera Law Group