Best International Fund for 2024

Focusing on the financial world, large-cap funds exhibited an average annual return of 16.15%, while mid-cap funds showcased a commendable 30.77% return. Notably, small-cap funds emerged as the frontrunners, boasting the highest average return at an impressive 34.29%.

This year witnessed a surge in investor interest in these funds, particularly capitalising on the prevailing small-cap upswing.

However, this popularity has caused an issue for fund houses like Nippon, Tata, and SBI, which have stopped accepting lump-sum investments in many small-cap funds since June 2023 to control the influx of money.

Despite the ongoing success of small-cap funds, we at Finology believe that the current boom might be more about excitement than solid fundamentals. Therefore, we anticipate a correction in this area next year. 

In the event of a downturn, investments in small-cap funds could bear the brunt, given the mandatory requirement for these funds to maintain at least 65% of their Assets Under Management (AUM) in small-cap stocks. Consequently, we are refraining from recommending such funds this year.

For those interested in the small-cap sector, we suggest looking into flexi-cap funds. These funds provide fund managers with more flexibility in managing the portfolio, offering a strategic alternative.

Instead, if you wish to have some exposure to small-cap space, you may go for the flexi-cap fund, as the fund manager has more liberty to allocate the portfolio.

So what now? 🤨

Instead of the small-cap fund, we are picking one international fund instead. Like small-cap funds, these funds can also offer high growth for high risk, with the added advantage of geographical diversification.

Fund Selection Process

Navigating through about 70 international mutual funds and ETFs in India was like choosing the best dish from a vast menu. With 31 new options introduced in the last three years, it added a bit of spice to our selection.

First, we checked the 1-year returns, aiming for an average of 17.76%. Surprisingly, over 60% didn't make the cut, leaving us with 26 contenders. Then, we looked at the expense ratios, wanting funds below the average of 0.85. 

Seven funds didn't pass the financial fitness test, and we were left with 19 strong options. Most of them had a thing for the American market, following indices like S&P 500, Nasdaq 100, or NYSE FANG+.

In the end, we checked how well these indices performed consistently. NYSE FANG+ seemed like the cool kid, but we decided to double-check with some backtesting. Turns out, our hunch was correct. Here’s what we found out:

Whether we're talking short-term or the long- look at 1-year, 5-year, and 9-year spans- the NYSE FANG+ index has consistently outshone its competitors. 

The data was crystal clear in our pursuit of superior returns in this category: hitching our wagon to a fund tracking NYSE FANG+ was the way to go. Only one such fund earned the honour of making it to our final list. So, drumroll, please! Our top choice in the equity international category is...

This fund provides an opportunity to tap into the growth potential of the world's top 10 technology giants, which are at the forefront of several transformative trends. With a modest investment, investors can access the global tech landscape and become part of the success stories of industry leaders like Facebook, Amazon, Apple, Netflix, Alphabet (Google), Tesla, Twitter, and more. 

These companies are strategically positioned to influence long-term megatrends that have the capacity to reshape businesses, societies, and economies, establishing themselves as frontrunners in their respective fields.

Why do we like this fund?

• This fund is positioned to benefit from the substantial growth anticipated in the top global tech firms.
• It presents an opportunity to ride the significant wave of technology expansion.

Caution: Due to global uncertainties, expect some volatility in the short-to-medium term.

About Mirae Asset NYSE FANG+ ETF FOF

Say hello to Mirae Asset NYSE FANG+ ETF FoF Direct-Growth, a global gem from Mirae Asset Mutual Fund. This fund has been rocking the financial scene for over 2 years since its launch on 19/05/2021.

Now, let's talk numbers. With ₹1018 crore in Assets Under Management (AUM) as of November 2023, it's like the Goldilocks of funds – not too big, not too small, just right. 

And guess what? The expense ratio is a budget-friendly 0.04%, making it a smart choice compared to most other international funds.

In the last year alone, it flexed a 70.67% return. Since day one, it's been hitting an average of 15.04% yearly. Impressive, right?

Wondering where it puts its money? Well, the majority goes into unclassified sectors, and it has less exposure in unclassified sectors than other funds in the category.

The Bottom Line

As we go deeper into mutual funds, it's heartening to see how the Indian crowd is actively participating in this financial journey. Explore more articles on Insider by Finology for additional insights. 

Stay connected for these upcoming articles, and don’t miss out on the free downloadable report available at Recipe by Finology. Alright, catch you on the flip side! 🚀

Disclaimer: The funds mentioned in this article are not a recommendation by Finology and should not be construed as such. The funds are mentioned based purely on numerical factors, and the process of selection should follow thorough research and professional advice.