# International Equity Funds for Indian Investors: A Practical Guide

*By Utkarsh Agrawal · 10 min read*

India is ~4% of global equity market cap. Your portfolio is probably 100% India. That's a 96% home bias.

## Why diversify outside India
1. **Sectors you can't get here** — Apple, Microsoft, Nvidia, ASML, LVMH, Novo Nordisk have no NSE equivalents.
2. **Currency hedge** — INR structurally depreciates vs USD.
3. **Smoother returns** — India and global markets aren't perfectly correlated.
4. **Access to dominant business models** — largest software, semis, AI, luxury businesses are abroad.

## How much should sit outside India?
- Most investors: **10–20% of equity**
- HNIs / USD earners: 25–30%
- Long-horizon early-career: 15–20% sweet spot

## Four ways to get international exposure
1. **Indian MFs investing internationally** — easy, INR-denominated, KYC done. (SEBI-cap may constrain subscriptions.)
2. **Index funds tracking S&P 500 / Nasdaq 100** — cheap, broad-based.
3. **Active global / thematic funds** — satellite allocations.
4. **Direct US investing via LRS** — Vested, IBKR, INDmoney. Note: 20% TCS above ₹7L/year (recoverable); Schedule FA in ITR.

## Tax treatment
- Post-2023, most international MFs taxed as **debt funds** (slab rate, no LTCG benefit) unless hybrid with sufficient Indian equity.
- Direct US: LTCG above 24 months at 12.5% post-Budget 2024 + foreign tax credit on dividends.

## Our framework
1. Start with 10–15% in a US-focused or developed-market international fund.
2. SIPs while open; LRS ETFs when fund routes constrained (HNI).
3. Don't chase the hot international fund — broad index beats sector bets.
4. Review allocation annually.

International equity research is our specialty — [book a free call](/contact/) for an allocation plan.