Mutual fund investors looking to diversify their portfolio allocation beyond Indian equities to international or overseas funds have one opportunity open now to gain exposure to global markets across different geographies.
Following a temporary pause triggered in December 2025, HSBC Mutual Fund has opened fresh contributions in three international funds as of August 18, 2026. The three plans are the HSBC Global Emerging Markets Fund, the HSBC Brazil Fund, and the HSBC Asia Pacific (Ex Japan) Dividend Yield Fund. Additionally, HSBC has also highlighted that, as of March 25, 2026, the HSBC Global Equity Climate Change Fund of Fund (FoF) was merged into the HSBC Global Emerging Markets Fund.
However, according to the HSBC Mutual Fund announcement, fresh or additional purchases will be subject to a monthly cap of Rs 2 lakh through multiple routes such as lump sum deposits, switch-ins, Systematic Investment Plans (SIPs), Systematic Transfer Plans (STPs), and IDCW Transfer Plans.
The resumption of fresh subscriptions in the three HSBC international funds came a day before Baroda BNP Paribas Aqua Fund closed its window for new registrations on August 19. The fund had resumed fresh subscriptions on August 3, 2026, after remaining closed to new investments since July 23, 2026, according to Value Research.
Major AMCs including PGIM India, Franklin Templeton, Edelweiss, Nippon India, and others prohibit fresh inflows into their international schemes as a result of exceeding the foreign investment restrictions that apply to Indian mutual funds by the Securities and Exchange Board of India (SEBI) in collaboration with the Reserve Bank of India (RBI).
These restrictions include a $7 billion maximum for the mutual fund industry as a whole, a $1 billion maximum for foreign exchange-traded funds (ETFs), and a $1 billion maximum for each Asset Management Company (AMC).
Performance of 3 HSBC global funds
Leading the performance metrics is the HSBC Global Emerging Markets Fund, which delivered stellar SIP returns over 1, 3 and 5 years. Following closely, the HSBC Asia Pacific (Ex Japan) Dividend Yield Fund and the HSBC Brazil Fund also reflected healthy SIP returns.
| Funds – Direct plan | 1-Year SIP Returns In % | 3-Year SIP Returns In % | 5-Year SIP Returns In % |
| HSBC Global Emerging Markets Fund | 44.29 | 36.62 | 23.84 |
| HSBC Asia Pacific (Ex Japan) Dividend Yield Fund | 35.02 | 32.46 | 23.16 |
| HSBC Brazil Fund | 24.58 | 22.76 | 16.06 |
Source: Fund factsheet as of 31st July 2026
Lump-sum performance
HSBC Asia Pacific (Ex Japan) Dividend Yield Fund
The HSBC Asia Pacific (Ex Japan) Dividend Yield Fund – Direct Plan delivered strong returns over the 1-, 3- and 5-year periods. Over the one-year period, the fund generated a return of 42.57%, turning an investment of Rs 10,000 into Rs 14,257.
Over three years, the fund delivered an annualised return of 25.01%, with Rs 10,000 growing to Rs 19,549. The fund slightly trailed its scheme benchmark, which returned 25.43% annually over the same period.
Over the five-year period, the fund generated an annualised return of 14.76%, outperforming its scheme benchmark’s 13.82% annualised return. A Rs 10,000 lump-sum investment made five years ago would have grown to Rs 19,920.
| Fund – Direct plan | 1 Year Returns In % | 3-Year Returns In % | 5-Year Returns In % |
| HSBC Asia Pacific (Ex Japan) Dividend Yield | 42.57 | 25.01 | 14.76 |
| Benchmark Index: MSCI AC Asia Pacific ex Japan TRI | 46.62 | 25.43 | 13.82 |
HSBC Brazil Fund – Direct Plan
The HSBC Brazil Fund – Direct Plan delivered a strong 46.94% return over the past 1-year, turning a lump sum investment of Rs 10,000 into Rs 14,694.
Over the 3-year period, the fund gave an annualised return of 11.53%, with Rs 10,000 growing to Rs 13,877.
Over 5-years, the direct plan generated an annualised return of 6.55%, taking Rs 10,000 to Rs 13,735.
| Funds | 1 Year Returns In % | 3-Year Returns In % | 5-Year Returns In % |
| HSBC Brazil Fund – Direct Plan | 46.94 | 11.53 | 6.55 |
| Benchmark (MSCI Brazil 10/40 Index TRI) | 58.12 | 14.92 | 12.4 |
HSBC Global Emerging Markets Fund – Direct Plan
The HSBC Global Emerging Markets Fund – Direct Plan delivered a strong 53.83% return over the past one year, with a lump-sum investment of Rs 10,000 growing to Rs 15,383.
Over the three-year period, the direct plan generated an annualised return of 25.02%, taking Rs 10,000 to Rs 19,553.
Over five years, the fund delivered an annualised return of 12.34%, growing Rs 10,000 to Rs 17,906.
| Funds | 1 Year Returns In % | 3-Year Returns In % | 5-Year Returns In % |
| HSBC Global Emerging Markets Fund – Direct Plan | 53.83 | 25.02 | 12.34 |
| Benchmark Index: MSCI Emerging Markets Index TRI | 48.71 | 25.36 | 13.54 |
Source: Fund factsheet as of 31st July 2026
How are investors subject to a double expense ratio in international mutual funds?
Most international mutual funds in India operate as fund-of-funds. The Indian scheme invests in an overseas fund or ETF, which then invests in global securities.
Investors therefore bear expenses at two levels, one charged by the Indian fund and another by the underlying overseas fund.
For instance, if the Indian fund charges 0.8% and the underlying fund charges 0.7%, the combined cost could be around 1.5% annually.
These expenses are adjusted in the NAV and reduce the investor’s final return. Choosing a direct plan can lower the cost at the Indian fund level, but the expense of the underlying fund will remain.
What should investors do?
Since the regulatory limits on overseas investments by the Indian mutual fund industry have largely been exhausted, fund houses can accept fresh investments only when some headroom becomes available.
“This may happen because of redemptions or a fall in the value of existing overseas investments. This is why international funds frequently open and close for fresh investments. HSBC’s decision to reopen three schemes indicates that some investment headroom has become available,” said Bharath Rathore, Executive Director, Anand Rathi Wealth Ltd.
However, this does not mean the overall industry limit has been relaxed, nor does it mean investors should rush to invest simply because the schemes have reopened.
“International equities can provide geographical and currency diversification, but in our view, the allocation should generally be limited to around 5% to 10% of the overall portfolio,” recommended Rathore.
Global investing involves several moving factors, including currency movements, geopolitical developments, different economic cycles and changes in overseas regulations. Tracking all these variables may be difficult for most investors.
At the same time, the Indian market continues to offer strong long-term potential. India’s healthy macroeconomic position and the favourable turn in corporate earnings could support domestic equities over the long term.
Therefore, international equities may be used as a supplementary allocation for diversification, while Indian equities should continue to form the core of the portfolio with a mix of funds based on your risk tolerance and financial goals.
Disclaimer: This article is for informational purposes only and should not be construed as investment, financial, tax, or legal advice. Any illustrations, examples, or return projections used in this article are for explanatory purposes only and do not guarantee actual investment outcomes. The views and opinions expressed by experts quoted in this article are their own and should not be considered investment recommendations. Readers should consult a qualified professional before making any financial decisions.
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