Indian Mutual Funds Investing in US Stocks

For Indian investors, diversification no longer needs to stop at equities and bonds at home. The U.S. market remains as a very lucrative and diversifying opportunity which remains the world’s largest and a hub for innovation across technology, healthcare, and consumer businesses. One way to gain access to the U.S. markets is by opening an overseas brokerage account but an easier alternative is to use Indian mutual funds that invest in U.S. stocks. Through these mutual fund schemes, investors have a chance to tap into companies such as Apple, Microsoft, and Amazon, while keeping everything managed in rupees through domestic platforms.

In this blog, we explore how these funds work, the benefits and risks, and provide a list of Indian mutual funds investing in US stocks.

Why Look at US Equities?

The US stock market has historically delivered steady long-term returns. It is also widely seen as the world’s innovation hub because it is home to many leaders in cloud computing, artificial intelligence, semiconductors, pharmaceuticals, and consumer technology. For Indian investors, adding U.S. equities brings two clear benefits:

• Geographic diversification: It reduces the reliance on Indian investments by diversifying the exposure to an international market like the U.S.
• Dollar-based assets: Since these investments are linked to the U.S. dollar, they can act as a long-term hedge against rupee depreciation, as the dollar has historically appreciated against the rupee.

These advantages explain why there is a growing set of Indian mutual funds investing in U.S. stocks, giving local investors an accessible route to participate in global growth.

Key Benefits of a Mutual Fund Investing in the U.S.

• Global exposure, local process: Investors can put in money in rupees through the same mutual fund platforms they already use, while still getting access to international diversification. This removes the need to open overseas accounts or deal with forex transfers directly.
• Expert fund management: These funds are run by established global asset managers, ensuring that research, portfolio construction, and risk management are handled professionally. For retail investors, this is often a more efficient way to participate in foreign markets than trying to build and manage a portfolio themselves.
• Participation in global leaders: By investing in these schemes, Indians can indirectly own shares of iconic U.S. companies such as Apple, Microsoft, Tesla, Amazon, Google and Nvidia. These businesses are not listed on Indian exchanges, so mutual funds provide a convenient channel to gain exposure to them.

Risks to Keep in Mind

• Currency risk: While a stronger dollar benefits rupee investors, a sharp fall in USD/INR can reduce returns.
• Market cycles: U.S. stocks can face periods of high volatility, especially in sectors like technology.
• Regulatory limits: The Reserve Bank of India places an overall cap on how much domestic fund houses can invest overseas, which occasionally leads to temporary restrictions on inflows.

List of Indian Mutual Funds Investing in US Stocks

Here are some popular schemes currently available for investors (indicative, not exhaustive):

Source: AMFI

These options provide investors with different ways of accessing the US market, through broad indices, blue-chip companies, or tech-focused portfolios.

Best Indian Mutual Funds Investing in US Stocks

Choosing the best Indian mutual funds investing in US stocks is less about picking a single winner and more about finding a fund that fits your profile as an investor. If you prefer a simple, low-cost way to get exposure, index-oriented funds such as those that track the Nasdaq 100 can be attractive. These give access to some of the biggest U.S. technology companies while keeping expenses under control.

For investors who are open to taking on a bit more risk, actively managed options like Nippon India US Equity Opportunities may appeal. Here, professional fund managers take active calls with the aim of outperforming the benchmark over time.

The right fund for you will depend on what you want to achieve. For some, the goal might be building wealth steadily over the long run. For others, it could be adding dollar exposure or riding the growth of U.S. technology leaders. What matters is matching the fund to your personal financial plan, not chasing quick returns.

Should You Invest in Indian Mutual Funds Investing in US Stocks?

For investors with a longer investment horizon, setting aside a small portion of their portfolio in Indian mutual funds investing in US stocks can be a smart move. Many financial advisors suggest keeping about 10-15% in international funds, as this not only diversifies the risk but also gives exposure to growth opportunities beyond the Indian market.

That said, this allocation should work alongside and not in place of your core holdings in Indian equities, debt, and other domestic assets. The goal is to create balance by adding global diversification, not to shift your entire portfolio abroad.

Global exposure is no longer just a fashionable idea; it is steadily becoming part of mainstream portfolio planning for Indian investors. With a growing list of Indian mutual funds investing in US stocks, gaining access to companies in the S&P 500 or tapping into U.S. tech through the Nasdaq 100 has become far more convenient.

However investors should note that in recent months, many international mutual fund schemes have temporarily halted fresh investments due to regulatory caps, this includes popular U.S. focused funds. These restrictions are rooted in SEBI and RBI limits on overseas fund investments.

Read here for more details on how these caps are impacting global investing options.

Disclaimer:

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