Retail investors who had stayed put without redeeming their investment in overseas funds benefited through mark-to-market gain, said Sunil Subramaniam, CEO, Sense and Simplicity.
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Many mutual fund investors have missed out on the boom in international markets due to the regulatory restrictions on fresh investments into such funds. Data shows that funds focused on stocks overseas delivered some of the best returns. Those who stayed invested, cutting out the noise and retaining their investments in these funds for last three years, have benefited from the overseas markets rally.
The asset under fund of funds (FoF) of MFs investing in global markets increased 28 per cent to ₹35,965 crore in November, against ₹28,065 crore in January due to mark-to-market gains.
HSBC Brazil Fund and Edelweiss Europe Dynamic Equity Offshore Fund have delivered the highest return of 56 per cent and 51 per cent return, respectively, in the last one year.
Invesco India – Invesco Pan European Equity Fund of Fund and HSBC Global Emerging Markets Fund have given a return of 43 per cent.
The DSP World Gold Mining Overseas Equity Omni FoF and DSP World Mining Overseas Equity Omni FoF stole the show by returning 169 per cent and 80 per cent, respectively, in the last one year.
SEBI-regulated cap
However, new MF investors could not invest in these funds as the capital market regulator SEBI has stopped MFs from accepting fresh inflows in these overseas funds in 2022, capping the MF industry’s overseas investment at $7 billion and a separate limit of $1 billion for exchange traded funds.
Sunil Subramaniam, CEO, Sense and Simplicity, an individual think tank, said while retail investors would have missed the opportunity to invest abroad through MFs, high net worth investors and ultra-high net worth investors have taken the LRS route to invest in overseas markets.
Retail investors who had stayed put without redeeming their investment in overseas funds benefited through mark-to-market gain, he said.
International scenario
While the Nifty 50 delivered a return of around 9 per cent in 2025, the Dow Jones Industrial Average and tech-focused Nasdaq Composite indices delivered return of 13 per cent and 20 per cent, respectively. S&P 500 index gave 17 per cent return last year.
The MSCI All Country World Index climbed over 21 per cent last year, hitting a record high recently. European stocks surged on bank-heavy gains. Asia’s outlook hinges on policy support and AI demand, with gains uneven across markets.
South Korea, long among the weakest developed markets despite being home to corporate giants Samsung and Hyundai, topped the global rankings, with its KOSPI finishing up nearly 76 per cent.
Hong Kong’s Hang Seng Index ended the year nearly 31 per cent higher, while the SSE Composite Index in Shanghai was up more than 21 per cent. In Japan, the Nikkei 225 was up about 28 per cent. The FTSE 100 in London and DAX 40 in Frankfurt were both heading into 2026 up over 20 per cent.
Published on January 2, 2026