Investment Ideas: Index, EM funds present a good opportunity

Domestic investors looking to diversify their holdings into global assets in 2021 could consider a mix of funds investing in emerging markets, US tech 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 investment advisers’ top picks.

Investors could take some money off the table from their US-based investments and allocate that to emerging-market funds in the coming year, they said. The Franklin Feeder US Opportunities Fund has returned 47% over the past year and the Motilal Oswal Nasdaq 100 has returned 52%, while the PGIM Global Equity Opportunities Fund has returned 73.53% over the period.

“The US dollar is expected to weaken and there is a lot of money in bonds with negative yields. Much of that money will go to emerging markets,” said Anup Bhaiya, MD and CEO of Money Honey Financial Services. He recommends investors book some profits in the Nasdaq 100 Fund and invest some money in 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 multiple countries, including emerging amounts, and long-term investors should keep adding to them. “Business models of US companies are solid. Valuations are currently stretched globally due to liquidity and a lack of opportunity,” said Prateek Pant, Head of Products and Solution, Sanctum Wealth. Pant recommends the Motilal Oswal Nasdaq 100 ETF, the Franklin US Equity Opportunities Feeder Fund and the Edelweiss Great China Offshore Fund.

Most investors only started building their international portfolios in the past year. Advisors said index funds that bet on specific themes, such as technology, natural resources or specific countries, are the preferred bets

“We prefer to stick to big companies and use index funds to build an international presence,” says Rohit Shah, founder of Getting You Rich. He recommends Motilal Oswal S&P 500 and Nasdaq 100. Investment Ideas: Index, EM funds present a good opportunity

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