Mutual Fund Club

OTHER FUNDS -
INTERNATIONAL FUNDS,
FoFs, QUANT
International Funds

• International Funds are Mutual Funds which invest in assets (Equity,

Debt or other) listed outside India.
• Taxed as Debt Funds
• Easiest & least cost way to invest in Foreign Stocks
Types of International Funds
• Country Specific: Most famous International Funds, these funds invest in equities of specific global countries. For
Example:
• Edelweiss Greater China Equity Offshore Fund: A Fund of fund that will invest in companies domiciled in China or whose primary operations
are in Greater China region.
• Motilal Oswal NASDAQ-100 ETF: An index fund which invests in NASDAQ – 100 ETF. NASDAQ is a US based stock exchange.
• HSBC Brazil Fund: A fund of fund that invests in companies listed in Brazil.
• Region Specific: These funds invest in assets listed in group of countries. For Example:
• Franklin Asian Equity Fund: Principally invests in Asian companies/sectors, excluding Japan.
• Kotak Global Emerging Markets: Fund of fund that invests in mutual funds with a primary goal to invest in emerging markets.
• Edelweiss ASEAN Equity Off-shore Fund: An equity fund which invests primarily in companies of countries which are members of the
Association of South East Asian Nations (ASEAN)
• Commodity Funds: These funds invest majority of their assets in global companies involved in commodity business
such as mineral exploration, mining, agriculture etc. Few Examples:
• DSP BlackRock World Energy Fund: Invests in the equity securities of companies which have predominant economic activity in exploration,
development, production and distribution of energy.
• Aditya Birla Sun Life Global Commodities Fund: Fund of funds which invests in a range of companies engaged in the discovery,
development, extracting, processing and distribution of natural resources.
• DHFL Pramerica Global Agribusiness Offshore Fund: Fund of funds which invests in assets of companies with principal business activity in
or profiting from the agricultural industry.
• Real Estate Funds: Example: Aditya Birla Sun Life Global Real Estate Fund: Fund of funds which invests in stocks of
companies operating in the real estate and real estate related sectors.
• Global Gold Funds: Example: Kotak World Gold Fund: A fund of funds which invests mainly in gold mining stocks world-
wide
• Hybrid: Example: Parag Parikh Long Term Value Fund which has invested small amount of their assets in US companies
such as Google, Apple, IBM, 3M etc. and rest in Indian Equity stocks.
Children & Retirement Fund
• Hybrid Funds
• Retirement - Lock-in of minimum 5 years or retirement whichever is
earlier.
• Children education/gift funds, the lock-in will be 5 years or the child
becoming a major
• No other tax benefit
Fund of Funds
• Fund of Funds is a type of mutual fund scheme that invests in funds of
other mutual fund house or in schemes or funds of the same mutual fund
house rather than directly in stocks, bonds and other securities.
• It is also called Multi Manager Investment.
• Taxation as Debt Funds
• Most of FoF invest in the schemes of their own Fund house
• Example of Quantum Equity FoF Portfolio (May 2020) -
Company % Assets
Invesco India Growth Opportunities Direct-G 14.27
Kotak Standard Multicap Direct-G 14.24
Mirae Asset Large Cap Direct-G 14.07
ICICI Pru Bluechip Direct-G 13.95
L&T Midcap Direct-G 13.47
Axis Bluechip Direct-G 13.29
Franklin India Prima Fund - Di 12.9
Quant Funds
• Quant-based schemes have a data-driven approach to pick stocks.
• They create a stock-picking model using various parameters. The
model then selects stocks that match the parameters.
• The idea is to free stock-picking from human intervention.
• The expense ratios of the existing quant funds are between what
exchange-traded funds (ETFs) and actively managed funds charge.
• Quant funds make sense for savvy investors