Here’s how you can add global funds to your portfolio

India is one of the expanding economies in the world. Still, it represents a miniscule percentage of the world’s equity market. Due to few themes and market opportunities, investors are now keen on exploring the foreign markets, especially through passive funds such as ETFs, for portfolio diversification and wealth creation.

Thus, to help investors with the nitty-gritty of global markets, various avenues and much more, financial experts ‘demystified global investing with passive products’, during the second season of ‘Decoding the world of ETF’ by Mirae Asset Mutual Fund and Moneycontrol.

During the insightful conversation about how investors should begin their journey with global funds, speakers Siddharth Srivastava, Head – ETF Product, Mirae Asset Investment Managers India and Gurmeet Chadha, Co-founder& CEO, Complete Circle Consultants told Sumaira Abidi of CNBC-TV18 why it is important to understand the intent and goal of the investments.

Chadha said it is all about blending different styles of investing as each market and asset class presents unique opportunities.

“Global investing definitely deserves an allocation in the client portfolio. It can vary from 10-15%, depending upon the risk appetite and financial goals. A lot of investors may have goals relating to buying overseas assets or sending children abroad. For unfamiliar terrain, or if you are entering for the first time and knowledge is limited, passive makes more sense,” he said.

The experts were of the view evolved investors can explore different themes as per the aim and how it fits in the asset allocation mix.

Meanwhile, for new retail investors, Srivastava detailed out how a passive portfolio should look like.

“Investors can start with 5% allocation and increase it to 10-15%. The initial allocation for less savvy investors can be based on plain vanilla passive products, something based on NASDAQ, S&P500, that should be the core allocation and then probably as a satellite, or tactical allocation, investors can take exposure into emerging or disruptive technologies and probably he/she can add those funds providing exposure into companies providing these technologies,” said Srivastava.

The webinar also delved into possible combination of domestic funds with global products, overlapping of funds, ETFs, tracking error, etc.

Watch the full episode here