Question: Kindly let me have your advice on ICICI Prudential US Bluechip Equity Fund NFO?
Mr. Gerard Colaco: Some international diversification would certainly be recommended for Indian investors. But, such international funds must be recommended only for investors who have a substantial commitment to Indian mutual funds already. Say, if an investor has SIPs into a couple of actively managed diversified Indian equity funds, a couple of passively Indian equity index funds and one Indian diversified mid-cap fund, then the sixth SIP could be into an international fund.
However, I would prefer the Franklin US Opportunities Fund, because it is better diversified. The ICICI Prudential US Equity Bluechip seeks to invest in a concentrated portfolio of only 25 to 40 bluechip stocks. But they want to benchmark this fund against the S&P 500 index!
Mr. Harish Rao: The another big difference between Franklin Templeton and ICICI Prudential offerings is that the former is a feeder fund, while the latter is actively managed from India. Therefore the former is managed by an American with the American / International investor in mind, while the latter is managing it with brands that the Indian investor has in mind.
For a HNI, I would definitely recommend international diversification as it offers lower co-relation to Indian securities and the fact that there is some exchange rate protection also available.