The Buyt Desk
The world has become a global village, so your investment portfolio should also expand to the next shores. For investors who do not know boundaries, there is Global Fund. This fund would allow you to diversify your portfolio by investing globally. Let us check what is Global Fund, what are its features and types?
What Are Global Funds?
Global investment means investing in companies having a global presence. These companies allow investors to invest money in the international market. So, does this mean the global fund or international fund is the same? The answer is No! They both are different. The Global fund allows investors to invest money in the Global market, including their native market. While the international funds let investors invest in the international market, which does not include their own country.
What Are The Features Of the Global Fund?
Following are the top features of Global Fund.
Diversifies the Portfolio – Global investment fund comprises a range of securities in multiple countries. It diversifies the investment portfolio of investors. Additionally, it disperses the risk.
Return on Investment and Risk – With a Global Fund, you are investing in the market of different countries. So, the ROI will depend on the economic conditions of that country. The fund provides you with the option to choose a steadier market before investing. Certainly, the return on investment varies according to the market condition, but it will not have a concentrated risk.
A Hedge Against Inflation – The Global fund can act as a hedge against inflation because of dispersing risk.
How Is Global Fund Taxed?
The mutual funds that invest in the foreign market are considered debt funds. Hence, they are taxed similarly. The global fund is taxed this way.
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When an investor sells the fund units within three years of purchase, the gained profit becomes taxable. There will be a liability of Short term Capital Gains Tax.
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On the other hand, if an investor sells the fund units after three years of purchase, the profit gets taxed at 20% with indexation benefits.
What Is The Structure Of the Global Fund?
Structure-Based on The Investment Mode
Direct Investment Fund – In this investment, local fund managers directly handle the investor’s portfolio.
Indirect Investment Fund – In this investment scheme, funds are not invested directly. There are two options present in this investment category.
Feeder Fund – In this category, fund managers collect the fund from investors and forward it to offshore fund houses for investment.
Fund Of Funds – In this investment category, funds are collected and invested in the collection of foreign funds.
Blend Of Domestic and Foreign Equity – These funds invest investors corpus in both domestic and global markets. This type of fund is an option for moderate risk taker investors.
Structure-Based on The Region
Regions-Specific Fund – The investment option allows you to invest only in a specific country or region.
Global Fund – It invests money globally.
Structure-Based on Theme
This investment option allows investors to choose various sectors or themes to invest money in, such as energy, gold, mining, commodities, etc.
