Domestic Funds with Foreign Equity Exposure: A Viable Alternative

Investors seeking exposure to overseas markets have limited options after international mutual fund schemes restricted fresh subscriptions due to overseas investment limits. However, domestic mutual funds with significant foreign equity exposure can be a viable alternative.

Domestic Funds with Foreign Equity Exposure

A Value Research analysis of the June 2026 portfolio holdings of equity and hybrid mutual funds reveals that 15 domestic schemes have more than 10% allocation to foreign stocks. These funds offer investors access to global companies and markets, albeit with varying primary objectives.

The top two domestic funds with foreign equity exposure are the Edelweiss Technology Fund and the ICICI Prudential Passive Multi-Asset FoF, both of which have over 26% allocation to foreign equities.

Edelweiss Technology Fund: A Leader in Foreign Equity Exposure

The Edelweiss Technology Fund has the highest foreign equity exposure at 26.8%, with investments in global technology giants such as Nvidia, Apple, Microsoft, Broadcom, and Micron Technology.

Market Impact and Details

• The ICICI Prudential Passive Multi-Asset FoF invests through global ETFs, including the iShares MSCI Japan ETF, iShares MSCI China ETF, and iShares Latin America 40 ETF.
• The Motilal Oswal Asset Allocation Passive FoF – Conservative gained foreign exposure through the Motilal Oswal S&P 500 Index Fund, which accounted for around 10.35% of its portfolio.
• While these schemes provide access to global companies and markets, their primary objective may not always be international investing.

Key Takeaways

• 15 domestic mutual funds have more than 10% allocation to foreign stocks.
• The Edelweiss Technology Fund and the ICICI Prudential Passive Multi-Asset FoF have over 26% allocation to foreign equities.
• Domestic funds with foreign equity exposure can be a viable alternative for investors seeking exposure to overseas markets.

FAQs

What are the top domestic funds with foreign equity exposure?

The top two domestic funds with foreign equity exposure are the Edelweiss Technology Fund and the ICICI Prudential Passive Multi-Asset FoF, both of which have over 26% allocation to foreign equities.

How do domestic funds with foreign equity exposure invest in foreign markets?

Domestic funds with foreign equity exposure invest in foreign markets through various means, including global ETFs and index funds.

Can I still invest in international funds?

Yes, international funds are still available for investment, but fresh subscriptions have been restricted due to overseas investment limits.

Conclusion

Investors seeking exposure to overseas markets have limited options after international mutual fund schemes restricted fresh subscriptions due to overseas investment limits. However, domestic mutual funds with significant foreign equity exposure can be a viable alternative. It is essential to understand the primary objectives and investment strategies of these funds before making any investment decisions. Consult a SEBI-registered advisor before making any investment decisions.