Investors could take some money off the table from their US based investments and reallocate that to emerging market funds in the coming year, they said. Franklin Feeder US Opportunities Fund has returned 47% and Motilal Oswal Nasdaq 100 has returned 52% in the past year while the PGIM Global Equity Opportunities Fund has returned 73.53% in this period.
“The US dollar is expected to be weak and a lot of money is lying in bonds where yields are negative. Lot of this money will flow to emerging markets,” says Anup Bhaiya, MD and CEO, Money Honey Financial Services. He recommends investors to book some profits in the Nasdaq 100 Fund and move 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 amounts and long term investors should continue to add to them. “Business models of US companies are solid. Valuations currently are stretched globally driven by liquidity and lack of opportunity,” says Prateek Pant, Head of Products and Solutions, 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 one year. Advisors said index funds betting on specific themes like technology, natural resources or specific countries are the preferred bets
“We prefer to stick to large companies and use index funds to build international exposure,” says Rohit Shah, Founder, Getting You Rich. He recommends Motilal Oswal S&P 500 and Nasdaq 100.