Domestic investors looking to diversify into global assets in 2021 should consider a mix of funds investing in emerging markets, US technology stocks, China and global energy companies. Motilal Oswal Nasdaq 100, PGIM Global Equity Opportuities Fund, Edelweiss Greater China Offshore Fund and DSP World Energy Fund are among the top picks of investment advisors.
Investors could take some money off the table from their US-based investments and reallocate that to emerging market funds over the next year, they said. The Franklin Feeder US Opportunities Fund has returned 47% in the past year and Motilal Oswal Nasdaq 100 has returned 52% in the past year, while the PGIM Global Equity Opportuities Fund has returned 73.53% in this period.
“The US dollar is expected to be weak and there is a lot of money in bonds with negative yields. Much of this money will flow into emerging markets,” said Anup Bhaiya, MD and CEO, Money Honey Financial Services. He advises investors to make some gains in the Nasdaq 100 Fund and transfer some money to emerging market funds. He recommends Edelweiss Greater China Offshore Fund, PGIM Emerging Markets Fund and DSP World Energy Fund.
Some financial planners said it makes sense to continue with US funds, as portfolio managers buy into global giants with operations in several countries, including emerging funds, and long-term investors should continue to add to this. “The business models of US companies are solid. Valuations are currently stretched globally due to liquidity and lack of opportunity,” said Prateek Pant, Head of Products and Solution, Sanctum Wealth. Pant recommends Motilal Oswal Nasdaq 100 ETF, Franklin US Equity Opportunities Feeder Fund and Edelweiss Great China Offshore Fund.
Most investors have just started building their international portfolios in the past year. Advisors said index funds betting on specific themes such as technology, natural resources or specific countries are preferred
“We prefer to stick with large companies and use index funds to build international exposure,” said Rohit Shah, founder of Getting You Rich. He recommends Motilal Oswal S&P 500 and Nasdaq 100.
This post investment ideas: Index, EM funds offer a good opportunity
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