Investment Ideas: Index, EM funds offer a good opportunity

Domestic investors could consider a mix of funds investing in emerging markets, U.S. technology stocks, China and global energy companies in 2021 to diversify their holdings into global assets. Motilal Oswal is among the top picks of investment advisors from Nasdaq 100, PGIM Global Equity Opportunity Fund, Edelweiss Greater China Offshore Fund and DSP World Energy Fund.

Investors could take some money off the table from their U.S.-based investments and redistribute it to emerging market funds next year, they said. Franklin Feeder US Opportunity Fund returned 47% and Motilal Oswal Nasdaq 100 returned 52% last year, while PGIM Global Equity Opportunity Fund returned 73.53% during the period.

“The US dollar is expected to weaken and a lot of money is lying in bonds where yields are negative. Much of this money will flow into emerging markets, “said Anup Bhaiya, MD and CEO, Money Honey Financial Services. He advised investors to book some profits in the Nasdaq 100 fund and transfer some of the money to emerging market funds. He recommends Edelweiss Greater China Offshore Fund, PGIM Emerging Markets Fund and DSP World Energy Fund.

Some financial planners say it is understandable that US funds continue to flow because portfolio managers shop with global giants, including activities in a variety of emerging countries, and long-term investors should continue to add to them. “The business models of US companies are tough. The valuation is currently expanding due to the lack of liquidity and opportunity worldwide, “said Sanctum Wealth, Head of Products and Solutions, Symbol Pant. Pant Motilal Oswal recommends Nasdaq 100 ETF, Franklin US Equity Opportunities Feeder Fund and Edelweiss Great China Offshore Fund.

Most investors have started building their international portfolios in the last one year. Advisers say that betting funds on specific themes, such as technology, natural resources or specific countries, are preferred bets.

Rohit Shah, founder of Getting You Rich, says, “We like to stick with big companies and use index funds to build international exposure. He recommends Motilal Oswal S&P 500 and Nasdaq 100.