International Mutual Funds

An international mutual fund invests outside India, in shares listed abroad or in overseas funds that hold them. A mutual fund is a pool of money from many people, invested by a professional manager under SEBI rules. Every fund belongs to a SEBI category, the regulator's label for what that fund may hold. No category is called “international”.

The SEBI categories that name overseas investing sit in its “Other Schemes” group. Funds on this page are set up through routes such as these:

• Overseas fund of funds (FoF). A fund of funds invests in other funds. SEBI requires it to keep at least 95% in its underlying fund. Overseas equity FoFs, whose underlying funds hold equity (shares of companies), can be country-specific, region-specific, or thematic and sector-based. There are also country or region debt FoFs, whose underlying funds hold debt (loans to governments, banks or companies). Some FoFs hold at least 35% each in Indian and overseas funds.
• Overseas index fund or ETF. An ETF, or exchange traded fund, is an index fund whose units trade on a stock exchange. An index is a list of companies picked by fixed rules, whose combined value is tracked every day. SEBI requires at least 95% of the fund's assets in that index's securities. SEBI wants an overseas index to be “standardized” and “broad based”, with at least 10 securities.

Separately, any scheme may buy shares of overseas companies listed on recognised stock exchanges abroad.

A fund house, the company behind a set of mutual funds, normally gets one scheme per category. FoFs with different underlying schemes, and index funds on different indices, are exceptions. That is how one fund house can offer several overseas FoFs.

Koshex shows two lists from our fund data, International and International Index, on this page.

All Indian mutual funds together may invest up to US$7 billion in overseas securities, and up to US$1 billion in overseas ETFs. These caps are industry-wide, which means shared by every fund house in India together. Each fund house also has its own cap:

• Overseas securities: up to US$1 billion.
• Overseas ETFs: up to US$300 million.

Inside the US$7 billion, SEBI reserves a quota of US$50 million for each fund house.

Schemes already running also get a monthly headroom. It equals 20% of the scheme's average overseas assets over the previous three calendar months. That headroom still sits within the caps above.

Every fund has a scheme information document, or SID, which sets out its rules and risks. For a fund that invests overseas, the SID must disclose the risks of these limits running out. It is worth reading that part before you put money in.

International funds sit at the top of SEBI's risk scale. Every listed international fund read Very High on 29 September 2026. That reading comes from the riskometer, the risk label SEBI makes every fund show, on six levels from Low to Very High, checked every month.

The label comes from a formula. SEBI scores each holding and works out a score for the whole fund. A fund scoring above 5 reads Very High. Foreign securities get a fixed score of 7. So do units of overseas mutual funds. A fund built from them therefore reads Very High by design.

Currency risk is the second layer. Shares listed abroad are priced in that country's currency, but your units are valued in rupees. So a change in the exchange rate changes what your units are worth, apart from any move in share prices.

SEBI makes every scheme that invests overseas disclose this in its SID. The rule names risk factors “including currency risk and risks arising from exhaustion of overseas limits”. They must be explained in language an average investor can follow. Each fund house must also have a policy on hedging foreign exchange risk. Hedging means holding something that offsets a price move.

Here is a made-up illustration, not a forecast. Suppose you hold ₹1,00,000 in such a fund. Over a year, its overseas shares end exactly where they began, in their own currency. Your units can still be worth more or less than ₹1,00,000, because the exchange rate moved.

Share prices abroad can also fall. If ₹1,00,000 fell 35%, it would be worth ₹65,000 for a while, in this hypothetical case.

International funds are not taxed as equity funds. Under the Income-tax Act, 2025, equity rates need 65% or more in Indian companies' listed shares. That share is averaged over the year (section 198(8)). Shares listed abroad do not count towards it.

They are not Specified Mutual Funds either. A Specified Mutual Fund has more than 65% in debt and money market instruments. Its units bought on or after 1 April 2023 are taxed at slab rate. These funds are not in debt. So the general capital gains rules apply.

The rate depends on your holding period: the time between buying a unit and selling it. An unlisted unit is one you buy from the fund, not on a stock exchange.

• Long-term capital gain: profit on an unlisted unit held more than 24 months. It is taxed at 12.5% of the whole gain, with no indexation, meaning no inflation adjustment to your cost (section 197).
• Short-term capital gain: profit on an unlisted unit held 24 months or less. It is taxed at your income-tax slab rate.
• Listed ETF units turn long-term after 12 months, not 24.

The ₹1,25,000 exemption for equity funds does not apply to these gains.

A worked example, on assumed gains. It leaves out surcharge, an extra charge on the tax itself once total income passes ₹50 lakh. Suppose you sell units of an international fund of funds 30 months after buying them, for a gain of ₹1,20,000. Held more than 24 months, that gain is long-term, and 12.5% of it is ₹15,000. Add cess, an extra 4% charge on the tax: ₹600. You pay ₹15,600.

On an equity-oriented fund, as your only long-term equity gain that tax year, the same ₹1,20,000 would sit inside the ₹1,25,000 exemption and cost nothing.

Now suppose you sell other units after 18 months, for a gain of ₹44,000. That is short-term. If the whole gain falls in a 20% slab, tax is ₹8,800 plus ₹352 cess, so ₹9,152. In a 30% slab it is ₹13,200 plus ₹528 cess, so ₹13,728.

IDCW means payouts a fund makes from its income or gains, which reduce its NAV (the price of one unit) by the amount paid. They are taxed at your slab rate. The fund takes 10% TDS (tax deducted at source, before the money reaches you) on such income above ₹10,000. It is credited against your tax for the year. No TDS is taken on a resident's redemption gains.

One exception. An international FoF that puts 65% or more into debt-oriented funds would be a Specified Mutual Fund. Its units bought on or after 1 April 2023 would then be taxed at slab rate, however long you held them.

Payout can take up to 5 working days after you redeem (sell your units back to the fund). That longer limit covers schemes with at least 80% in permitted overseas investments. Other schemes must pay within 3 working days.

You face no lock-in (a period during which you cannot sell at all). The exit load, a fee some funds charge if you sell within a set time after buying, is set scheme by scheme.

Koshex suggests 7 years or more, because these funds carry both share-price and currency risk. SEBI sets no horizon; this is Koshex's view.

Koshex talks you through sharp market falls before you redeem.

The three differ in what SEBI makes them hold and in how their gains are taxed.

• A flexi cap fund must hold 65% or more in equity, spread across large, mid and small Indian companies as its manager decides. It gets equity tax rates where 65% or more is in Indian listed shares.
• An Indian index fund holds at least 95% in the securities of its index. On an Indian share index, it meets the 65% test for equity tax.
• An international fund invests outside India. It is not taxed as an equity fund: 12.5% on the whole gain after 24 months for an unlisted unit, slab rate before that.

Risk labels look alike across the three. On 29 September 2026 every listed flexi cap fund read Very High, as did nearly every listed index fund.

An international fund's holdings differ from Indian shares, and it carries currency risk as well. It may suit someone who already has Indian equity funds, a long horizon and room for deep falls. Money for a goal two or three years away has far less time than the 7 years we suggest.

Koshex helps you choose a fund that suits your goal and timeline.

Compare an international fund with others that invest in the same country, region or theme. Funds here invest in different countries, regions and themes, so their returns are not directly comparable. 32 of the 33 listed funds have run for 3 years or more. Only they are ranked on 3-year return and counted in the averages.

• CAGR over 3 and 5 years: average yearly growth over the period, as if the fund had grown at one steady pace.
• Expense ratio: the fund's yearly fee, shown as a percentage of your money and taken out of the fund's value. Compare the expense ratio column, since it differs a lot between these funds.
• AUM (assets under management): what the money a fund manages is worth today, not what people paid in. Together these funds manage ₹43,951 Cr.
• Riskometer: check the level shown against each fund today.

The average 3-year CAGR across the list is 25.6%. It mixes single countries, regions and themes. Use it only to see where one fund sits, not as what international funds return.

SIP or lumpsum. A SIP invests a fixed amount at regular intervals, usually monthly. Each instalment buys units at that day's NAV and has its own holding period. So every SIP instalment in an unlisted unit needs more than 24 months before its gain is long-term. A lumpsum is one larger amount invested on a single date. How much fits depends on your horizon, your other holdings and how deep a fall you could live with.

Koshex holds AMFI registration ARN-154632 as a distributor, a registered intermediary that helps you buy and manage funds. Buying through us gets you the regular plan, the version sold through a distributor. Over time we review what you hold and flag changes in a fund's category, risk or ranking.