Top 4 US Based Mutual Funds and ETFs to invest now
We have been recommending some of the best international mutual funds for the past few years. Our funds list includes some of the good US based mutual funds that gave more than 30% annualized returns in the last few years. Now, after the dollar has become stronger than Rupee, everyone is looking to invest more in US based mutual funds. Why Indian Rupee is falling against the US Dollar? Which are the Top and best US Based Mutual Funds and ETFs that benefit from strong dollar? Who can invest in these US Based Mutual Funds and ETFs and for how long?
Also Read: Best International Mutual Funds to invest now
Why Indian Rupee is falling against the US Dollar?
Dollar to rupee was trading at Rs 65 during mid of Apr-2018. Now currently we need Rs 71.8 to buy a dollar. This is more than 10% of jump in a 5 month period. There are various reasons that are causing Indian rupee to fall against the dollar.
1) There is heavy demand for US Dollars.
2) Crude Oil Prices are rising. Crude Oil is now $ 75 per barrel.
3) US is putting pressure to India and other allied countries to stop buying fuel from Iran since November.
4) Global Trade War between the US and China on import tariffs is also weakening Rupee. The Chinese Yuan has also fallen sharply in the last few sessions.
5) There is a sudden spurt in US Dollar outflow which is weakening many currencies including Indian Rupee.
All these are triggering US Dollar to be stronger. Hence investors should tap the investment opportunities, even when Indian Rupee is becoming weak.
How we picked-up Top US Based Mutual Funds and ETFs now in 2018?
These Top US based mutual fund or ETF schemes are picked-up based on some of the parameters below.
1) We have picked the mutual fund schemes and ETFs that are investing in US Market either directly or indirectly.
2) Picked based on highest returns received in the last 1 to 3 years.
3) Since the US dollar is becoming stronger now, the returns in the last 3 months from such dollars would also make sense.
4) Crisil does not rank these funds, hence I have ignored this parameter in ranking the funds. Value Research Online (VRO) does not rank these funds, hence I have ignored this parameter in ranking the funds.
5) AUMs (Assets under management) >= 85 Crores. Since these are volatile compared to other equity funds, investment in these funds are less and I have reduced AUM parameter from minimum Rs 100 Crore to Rs 85 Crores.
Top 4 US Based Mutual Funds and ETFs that benefit from strong dollar
Top#1 – Motilal Oswal MOST Shares NASDAQ 100 ETF Fund
Overview: The mutual fund scheme seeks an investment return that corresponds to the performance of NASDAQ 100 Index, subject to tracking error.
Why to invest: This ETF fund scheme gave highest annualized returns of over 21% in the last 5 years, 24% annualized returns in the last 3 years and 41% returns in the last 1 year. This fund is not rated by Crisil nor by Value Research Online (sector funds, they don’t generally rate them). This fund was launched 7.5 years back, hence comparing to its benchmark of Nasdaq 100, this fund has outperformed all other international funds. Minimum investment is Rs 10,000 and no SIP is allowed. However, you can invest a fixed amount every month through Systematic Equity Plan (SEP). Its Top 5 Holdings include Apple Inc, Amazon.com Inc, Microsoft Corporation, Alphabet Inc class and Facebook Co. You need to have a demat account to invest in this as this is an Exchange Traded Fund (ETF). This is one of the good US Based ETF to invest in 2018.
Top#2 – Franklin India Feeder Franklin US Opportunities Fund
Overview: The mutual fund fund aims to provide capital appreciation by investing predominantly in units of Franklin U.S. Opportunities Fund, an overseas Franklin Templeton mutual fund, which primarily invests in securities in the United States of America. The fund principally invests in small, medium and large capitalization U.S. companies with strong growth potential across a wide range of sectors.
Why to invest: This fund scheme gave second highest annualized returns of over 14% in the last 5 years, 16% annualized returns in the last 3 years and 37% returns in the last 1 year. Minimum investment is Rs 5,000 and minimum SIP investment has been Rs 500 per month for 12 months. This fund invests in Franklin US Mutual Fund scheme directly and no separate investment objective. This fund can continue to benefit from dollar becoming strong. This is one of the Top US Based Mutual Fund to invest in 2018 when dollar becoming stronger.
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Top#3 – DSP US Flexible Equity Fund
Overview: The objective of this scheme is to achieve capital appreciation by investing predominantly in units of BlackRock Global Funds US Flexible Equity Fund. The scheme may also invest in units of other similar overseas mutual fund schemes.
Why to invest: This fund scheme gave second highest annualized returns of over 13% in the last 5 years, 17% annualized returns in the last 3 years and 31% returns in the last 1 year. Minimum investment is Rs 5,000 and minimum SIP investment has been Rs 500 per month for 12 months. This fund invests in Black Rock Global Funds – US Flexible Equity Fund scheme directly and no separate investment objective. This fund also can continue to benefit from dollar becoming strong. This is one of the Best US Based Mutual Fund to invest when the rupee is becoming weak and dollar stronger.
Top#4 – ICICI Pru US Bluechip Equity Fund
Overview: This scheme aims to provide long term capital appreciation by investing in equity and equity related securities, including ADRs, GDRs issued by Indian and foreign companies and companies listed on the New York Stock Exchange (NYSE) and NASDAQ.
Why to invest: This fund scheme gave 4th highest annualized returns of over 12% in the last 5 years, 16% annualized returns in the last 3 years and 31% returns in the last 1 year. Minimum investment is Rs 5,000 and minimum SIP investment has been Rs 1,000 per month for 6 months. This fund Top 5 holdings are Amazon Inc, Alphabet Inc Class, Merck & Co Inc, Mondelez International and Stericycle Inc. This is one of the Best Based Mutual Fund that is US based to invest now.
List of Top 4 US Based Mutual Funds and ETFs of 2018
Who can invest in these US Based Mutual Funds and ETFs?
US based mutual funds invests outside India in specific mutual funds or stock markets based out of US. These funds invest in stock markets of only one country i.e. US. Hence, these mutual fund schemes are high risk. If you are high risk investors and willing to take advantage of potential opportunities during the time when US economy and dollar becoming strong, you can invest in such funds. If you are a moderate risk taker or low risk taker, you should stay away from these US based MF schemes.
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Are these for long term investment?
Like sector mutual funds, even US based international funds are high risk and can change its direction in either way from positive to negative and vice versa. These US based international funds should be invested for short term to medium term of 1-3 years only. If you feel that there is potential in that segment you can continue to invest for little longer term up to 5 years.
Conclusion: One should have some exposure to US based international or global mutual funds in their portfolio to enjoy the returns from growth of such economies. You can consider 1-2 funds/ETFs from this list and can invest up to 10% of your portfolio in such funds. When you feel you got adequate returns of 15% to 20% returns per annum for a 1-3 year period, you can exit them. These US based funds are NOT for long term investment.
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Suresh
Top 4 US Based Mutual Funds and ETFs that benefit from strong dollar
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Hi Suresh,
Can you please suggest some of the best ETF in each category to buy?
Index Fund
Bank Fund
Gold ETF
Liquid ETF
International ETF
Thanks,
Deepak P