I do have some exposure to international equities. This is for the normal three reasons: a) Portfolio Diversification: reducing some country risk , b) Ability to own assets that have no good comparable in India, c) Alpha Generation: expands the addressable universe and gives more opportunities to find undervalued assets or asset classes. For eg, it looks like Chinese equities as a whole today is undervalued.
At the moment I have 3 sources of international investing:
- Parag Parikh Mutual Fund: 90% of my ‘managed’ equities is via Parag Parikh Flexi-Cap Fund which gives some exposure to large cap US tech companies
- Edelweiss China Fund: as of now the only fund I could find that gives exposure to Chinese equities
- Investments through the LRS Route. Here I mainly own 1 stock: An Italian Textile Company called Aquafil (ECNL). This company makes recycled nylon yarn. It has dominant moats and has no close comparable anywhere else in the world or in India. Being in the same industry, it is one that fits in my circle of competence and also one where I am able to get almost real time data on the company’s evolution.
Put together international stocks may be about 10% of the overall portfolio.
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