International SIP
Definition
International SIP involves investing in mutual funds that invest in stocks listed outside India — primarily in the US (S&P 500, NASDAQ) but also Europe, China, and other emerging markets. It provides geographic diversification and exposure to global companies like Apple, Microsoft, Google, and Amazon.
In Simple Words
India represents only about 3.5% of global stock market capitalization. By investing only in Indian stocks, you miss 96.5% of global opportunities. International SIP gives you access to global innovation leaders, currency diversification (dollar appreciation benefits), and protection against India-specific risks.
Real-Life Scenario
Siddharth allocates 15% of his total SIP (₹5,000/month) to a US-focused fund tracking S&P 500. Benefit 1: When Indian markets fell 15% in 2022, his US holdings fell only 8% — better diversification Benefit 2: The rupee depreciated from ₹74 to ₹83 per dollar — his US investment gained 12% just from currency movement Benefit 3: He now owns tiny pieces of Apple, Microsoft, Google, Amazon, and Tesla through one SIP
Key Points to Remember
Frequently Asked Questions
Test Your Knowledge
1 questions to check your understanding
What is the primary tax classification of international mutual funds in India?
Summary Notes
International SIP adds global diversification to your portfolio
10-20% allocation is optimal for most investors
Currency movement can add/subtract from returns
Taxed as debt fund — plan accordingly