If you only limit your investments to India, you are missing out on big potential gains and important safety nets – that was the core message by financial experts at the Mumbai edition of Mint Horizons, a top masterclass on global investing.
In the session, top fund managers including Saurabh Mukherjea, Founder and CIO at Marcellus Investment Managers, Nirmal Bari, Director and Principal Officer at PPFAS Alternate Asset Managers IFSC, Natraj S, Vice President – Investments (AIF) at DSP Mutual Fund, Vivek Iyer from Vivek Fund, Subho Moulik, Founder and CEO at Appreciate, Dharmendra Jain, Co-founder at Ionic Wealth, and Aashish P Somaiyaa, CEO at White Oak Capital spoke with Neil Borate, Editor-in-Chief at The Fynprint and offered practical tips on finding global opportunities, especially through GIFT City, India’s new financial hub. They also spoke about how investors can spread investments across the world and manage risk.
A case for global diversification
The core reason to invest outside India is low correlation. This means that when the Indian market is down, the US market (or others) might be up, and vice versa. This keeps your overall portfolio’s growth smooth through effective diversification.
Watch the full episode below,
Saurabh Mukherjea from Marcellus highlighted the connection between India and America, which has ‘broken’ over the last 15 years. “The benefit is simple. You’ve got two strong markets, India and America… the correlation is very low. This is very interesting – the correlation between India and America has actually utterly broken. You don’t put all your money in one country and then pray feverishly at night. That is not investing, that is speculation.”
He also made a startling point about investing in India’s growth itself. Many global companies make a huge chunk of their profits from Indian customers. “If we want to capture the upside from India’s growth, necessarily you have to go and invest in companies outside India, such as Apple, such as Microsoft. If they were listed entities only in India, they would be making $20 billion in annual revenue. If you want to make money from India’s economic development, invest in the NYSE in companies who make far more from India than almost any Indian company does from India.”
For an average Indian investor, Mukherjea suggested a good split for stocks is 60 per cent in India and 40 per cent in dollar-based assets, based on a non-zero correlation of around 25-30 per cent between the two markets.
GIFT City: Your new gateway to global investments
GIFT City in Gujarat, India’s first International Financial Services Centre (IFSC), is rapidly emerging as the preferred route for Indian and global investors seeking efficient access to overseas assets. The panellists shed light on the regulatory and product innovations making this possible.
Marcellus, which launched its first global product three years ago, recently unveiled a NASDAQ ETF in GIFT City catering to rising corporate demand. “Nine months ago, the Reserve Bank of India (RBI) came up with the Overseas Portfolio Investment (OPI) regime, which meant that any corporate – and Marcellus is one of those corporates – can invest up to half of their net worth abroad through GIFT City,” Mukherjea explained. This has become a powerful enabler of international investment.
PPFAS has established a full-fledged Foreign Portfolio Investor (FPI) retail license in GIFT City, allowing them to launch PMS, AIF, and retail funds. Nirmal Bari added: “What we have launched so far is the PMS. It is outbound active. It will be a globally diversified, typically large-cap portfolio of 20 to 30 stocks. What we are looking at is whatever stocks that come in, they should have a diversified revenue pool and not be linked to one country’s economy too much.”
DSP was the first to launch a retail fund in GIFT City, catering to a broader investor base. Natraj S detailed their investment philosophy: “The principle remains the same. We want to generate 12-13 per cent dollar return in the long term by selecting a bottom-up approach. We are index agnostic. We don’t care really what happens in the index; we chase where value is. Valuation is a challenge because of the recent rally across the world, but we will gradually build out the portfolio over time.” The minimum ticket size for DSP’s retail fund is $5,000, making global diversification accessible.
Differentiated strategies
Beyond the mainstream large-cap funds, the event showcased innovative and differentiated strategies now accessible via the GIFT City AIF route.
Gold miners and niche sectors
One of the most compelling reasons to invest internationally is to gain exposure to asset classes or sectors which are simply unavailable in India. Vivek Iyer’s journey into launching the Vivek Fund, an AIF that invests in gold miners, perfectly illustrates this.
“There are no gold mining firms in India, so you have to go abroad. I think one of the most compelling reasons to invest internationally is simply that that asset class or that sector exposure is not available in India. You have no choice but to go abroad if you want that exposure,” Iyer said, explaining the genesis of his fund after his family office experience.
Global innovation and emerging markets ex-India
Dharmendra Jain of Ionic, a firm focused on democratising investments, spoke about a bottom-up approach to a “Global Innovation Fund”. “We do believe that tech is not a normal vertical like your healthcare or a financial, but it is almost an economic horizontal. Our exposure in the US is close to 36 per cent, and the balance portion is Far East, which contains China, Taiwan, and Korea, approximately 27 per cent of the fund,” Jain said.
Aashish P Somaiyaa of White Oak Capital Management brought attention to the often-overlooked opportunities in other emerging markets. The firm manages a dedicated Emerging Markets X India fund. “Emerging markets have been underperforming by a mile for ages. And the second is that if you invest in Emerging Markets X India, the correlation with India is 0.6. If you invest in emerging markets other than India, you get exposure which is complementary to investing in India,” Somaiyaa argued, presenting a powerful case for diversifying the emerging market component of an Indian portfolio.
Somaiyaa also provided clarity on the history of global product distribution in India, recalling his effort in launching one of the first US-focused funds: “I still remember a long conversation – I used to tour the whole country… and raised 65 crores only. This is what the challenge is. For the NASDAQ fund, for ages, from 2012 till 2018, that fund was 80–90 crores. Then it started to scale.”
Platforms and taxation: Lowering the investment friction
The discussion concluded with a focus on ease of access and the critical topic of taxation. Subho Moulik of Appreciate discussed how digital platforms are simplifying the process of going global.
“I actually think the friction has gone down because you have more digital journeys. TDS and things like that can easily be offset against your normal tax bill. You can just offset it, and you have the ability to increasingly access funds like Marcellus and others through platforms like ours,” Moulik explained.
“It is now a fully digital investing journey, which means you can sign up in roughly two to three minutes. You can complete a transaction in roughly less than a minute. Expect the number of people investing internationally to be double digits within the next two to three years,” he further said.
On the topic of taxation for Indian resident investors, Somaiyaa provided a key takeaway for investments routed through GIFT City structures: “The actual White Oak Emerging Markets X India fund is in Dublin, and from Dublin, wherever we invest in the world, it is tax-free because Dublin is a proper fund jurisdiction. At the GIFT City level, if you finish two years, it will be 12.5% plus surcharge.”
The takeaways from Mint Horizons – international diversification is no longer a luxury for the ultra-rich but a necessary component of a robust portfolio for every savvy Indian investor. The combination of low correlation, access to unique assets, and the structural efficiencies of GIFT City, along with easy-to-use digital platforms, has made the time to go global now.
Note to Readers: Mint Horizons Pune edition is presented in partnership with Appreciate.