The year 2025 has not been good so far for the Indian mutual fund industry, plagued by a continuous sell-off in domestic equities. Amidst the market turmoil, especially in the first two months of 2025, all mutual fund categories suffered heavy losses, especially small-cap and mid-cap funds. But amid this volatility, there was one category that gave some relief to the investors — international mutual funds. International funds gave an average positive return of 1.24%.
Small-cap and mid-cap funds major laggards
Small-cap funds suffered the biggest blow, generating an average (-)14.76% return for investors in the last three months. Mid-cap funds also gave an average negative return of (-)10.56%. Large-cap funds performed slightly better during this period but still suffered a loss of (-)3.33%.
Flexi-cap and multi-cap funds were also not untouched by the weak market sentiment. Flexi-cap funds saw an average return of (-)7.52% and multi-cap funds (-)9.15%. These figures clearly show that the beginning of 2025 has been difficult for mutual fund investors.
But when volatility was increasing in the Indian market, international mutual funds emerged as a safe haven for investors.
Also read: Top 5 international mutual funds to invest in India – Delivered up to 97% returns in 1 year
Here, we will take a look at the top 10 international funds with up to 30% returns in the last three months.
1. DSP World Gold FoF (29.77%)
Assets under management (AUM): Rs 1,058 crore
Expense ratio: 1.78%
2. Mirae Asset Hang Seng TECH ETF (24.24%)
Assets under management (AUM): Rs 404 crore
Expense ratio: 0.54%
3. ICICI Prudential Strategic Metal and Energy Equity FoF (21.63%)
Assets under management (AUM): Rs 92 crore
Expense ratio: 0.62%
4. Mirae Asset Hang Seng TECH ETF FoF (21.36%)
Assets under management (AUM): Rs 103 crore
Expense ratio: 0.11%
5. Nippon India ETF Hang Seng BeES (17.98%)
Assets under management (AUM): Rs 869 crore
Expense ratio: 0.93%
6. HSBC Brazil Fund (17.14%)
Assets under management (AUM): Rs 52 crore
Expense ratio: 0.93%
7. Edelweiss Europe Dynamic Equity Offshore Fund (16.90%)
Assets under management (AUM): Rs 107 crore
Expense ratio: 0.57%
8. Invesco India – Invesco Pan European Equity FoF (16.54%)
Assets under management (AUM): Rs 36 crore
Expense ratio: 0.58%
9. DSP World Mining Fund of Fund (11.22%)
Assets under management (AUM): Rs 126 crore
Expense ratio: 1.51%
10. Motilal Oswal Developed Market Ex US ETFs FoF (9.10%)
Assets under management (AUM): Rs 30 crore
Expense ratio: 0.15%
(Data: Value Research)
Also read: 4 Motilal Oswal funds are dominating! 1-year returns leave peers far behind
Will it be right to invest in international mutual funds?
If you want to diversify your portfolio, then international mutual funds can be a good option.
Benefits of investing in international mutual funds:
Risk distribution – If the Indian market falls but foreign markets are doing better, then your investment remains balanced.
Advantage of new sector themes – Many times sectors move forward in foreign markets, which are not that strong in India. For example, US and European companies are far ahead in Artificial Intelligence (AI), semiconductors and green energy.
Benefit of investing in dollars – If the rupee weakens, then investment made in dollars can give you additional profits.
Risks of investment in global mutual funds
Currency risk – Indian investors may suffer losses if the dollar or other foreign currencies weaken.
Volatility of foreign markets – Just as the Indian market fluctuates, foreign markets can also be affected.
Also read: Top 5 cheapest silver ETFs in 2025
Who should invest in international mutual funds?
If you are a long-term investor and want to spread your portfolio across different markets, international mutual funds can be a wise option. Especially when the Indian markets are trading at high valuations and global markets offer better opportunities.
However, before taking any decision, assess your risk appetite and consult a financial advisor if needed.
Summing up
When the Indian market was going through a downturn, international mutual funds provided relief to investors. At the beginning of the year 2025, all other equity mutual fund categories were in the red, but international funds proved themselves by giving positive returns.
If you do not want to limit your investments to the Indian market and want to take advantage of global opportunities, then international mutual funds can be a good option for your portfolio. But good research and planning is very important to make the right decision at the right time.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.