Why global investing matters now more than ever

At Mint Horizon Kolkata, a discussion on global investing opened with an idea that felt counter-intuitive at first, but instantly familiar.

“All of you already invest overseas,” said Neil Borate, Editor-in-Chief at thefynprint. “In fact, us Indians have been doing it for thousands of years.”

The example he pointed to was gold. India does not produce gold, yet Indian households have imported it for centuries, steadily accumulating it as a store of value. According to Borate, global investing is not a recent financial trend for Indians but a deeply ingrained behavioural instinct.

Gold, he explained, has long served as the Indian public’s default exit from the rupee. Whenever concerns surface around currency weakness or de-dollarisation, investors tend to return to the same question: should they buy gold instead?

Watch highlights from the session below,

Borate argued that this framing misses the larger point. Whether investors choose gold or overseas assets, the intent is the same: reducing dependence on a single currency and diversifying risk. The choice is not ideological, but structural.

Why Markets Rotate And Leadership Never Stays Fixed

That idea led naturally to the case for geographic diversification.

To explain why spreading investments across countries matters, Borate referred to a diversification chart produced by ET Wealth that tracks equity market performance across geographies. Each colour on the chart represents a different country or index, and the picture it paints is one of constant rotation rather than permanent leadership.

“Different countries do well at different points of time,” he said.

He noted that Germany currently appears near the top of the chart largely because the Nasdaq has been excluded. Had the Nasdaq been included, it would have ranked at the top, followed by Germany and then India. The insight, Borate stressed, lies not in identifying the current leader, but in recognising that global returns are inherently uneven.

Returns Are Powerful, But Structure Still Matters

To ground the idea in experience, Borate shared a personal example. In 2012, he persuaded his father to invest ₹5 lakh in a Nasdaq ETF. That investment is now worth roughly ₹85–90 lakh, translating into a compound annual growth rate of over 20%.

“We didn’t anticipate it would be this good, or we would have put in much more than ₹5 lakh,” he said.

But Borate was careful to add that access and structure matter as much as headline returns. Due to Reserve Bank of India limits on how much domestic mutual funds can invest overseas, several international feeder funds now trade at a premium. Because these funds cannot deploy incremental money abroad, new investors effectively buy units from existing holders.

This creates an embedded cost, often 3–5% upfront, which many investors do not even realise they are paying.

Currency Risk Is Structural, Not Episodic

From fund mechanics, Borate widened the lens to currency history.

At independence, the rupee traded at around ₹3 or ₹3.3 to the dollar. Today, it is close to ₹90. Borate asked the audience which year saw the sharpest fall in the rupee since independence. The answer was 1966, when the financial strain following the 1965 Indo-Pak war forced the government to devalue the rupee by 56%, a move announced in a Times of India headline at the time.

His point was that currency depreciation is not a one-off crisis, but a long-term structural reality that investors must account for when building portfolios.

What A Century Of Markets Reveals About Concentration Risk

Another chart Borate highlighted showed how countries’ shares of global equity markets have shifted over the past century. Britain, which once accounted for nearly 24% of global equity markets, now represents around 3%. The United States dominates today, but its rise has not been linear.

There were periods when US market share declined, not because the US weakened, but because other markets surged. Japan was the most striking example. During its bubble years, Japanese stocks and property rose so sharply that the land under Tokyo’s Imperial Palace was famously valued higher than the entire state of California.

That bubble temporarily shifted global market share away from the US. When it burst, Japan entered what are now known as its lost decades.

“When people talk about long-term equity returns, they’re not accounting for the fact that long-term domestic equity returns can be pretty dismal,” Borate said.

India, he argued, has also had long stretches where domestic investment options were limited. Investors who diversified into US equities earlier benefited disproportionately.

Five Practical Routes To Global Exposure

Against this backdrop, Borate outlined the practical routes available to Indian investors seeking global exposure today.

The first route is domestic feeder funds, which invest overseas through Indian mutual fund structures. The second is domestic multi-asset funds that combine Indian equities, overseas equities and gold. These funds continue accepting inflows even when overseas limits are hit because fresh money is routed into domestic assets.

The third route is direct investment in US stocks and ETFs through the Liberalised Remittance Scheme, under which individuals can invest up to $250,000 per year overseas.

The fourth route is GIFT City retail funds, which now allow investments starting at around $5,000. The fifth route is Alternative Investment Funds operating out of GIFT City.

AIFs typically require a minimum investment of $150,000. Borate pointed out that accredited investors, defined as those with a net worth of $1 million or more (roughly ₹9 crore) or an annual income of $200,000 or more, can access significantly lower minimums, sometimes as low as $10,000.

Why GIFT City Changes The Compliance Equation

Borate also outlined the structural advantages of GIFT City investing. Assets held within GIFT City are not subject to US estate tax. Schedule FA reporting is not required, easing tax compliance. Importantly, GIFT City funds are regulated by the International Financial Services Centres Authority, giving investors an Indian regulator to approach in case of issues.

He stressed that global investing should not be mistaken for US-only investing.

“The US is the mother market,” he said, explaining that it offers access to investment opportunities across the world.

His own ETF holdings span Mexico, Brazil, Indonesia, Vietnam, South Korea, US energy and US small-cap stocks. One Brazil ETF rose nearly 40% in the previous year after years of stagnation, underscoring both the upside and the patience required in global allocations.

Gold And The Behavioural Cost Of Poor Timing

With gold rising 1–4% on some days while equity markets declined, he acknowledged that recent price action has dominated investor psychology.

He shared that he began investing in gold in 2012, coincidentally the same year as the Nasdaq ETF investment, putting ₹5 lakh from his father’s account. For the next six years, gold delivered flat returns.

“We did not compound a bad buy decision with a bad sell decision,” he said.

That investment now delivers a CAGR of around 11%. Respectable, he said, but far from exceptional. The lesson was not about gold itself, but about entering any asset at the wrong point in its cycle.

“If you pick the wrong asset at the wrong point of time in its cycle, you can have a pretty miserable long-term journey,” Borate said.

How Professional Investors Structure Global Portfolios

That caution set the stage for how professional investors think about global exposure.

Neil Parikh, CEO of PPFAS Mutual Funds, explained that PPFAS currently runs a portfolio management service out of GIFT City with two strategies. The discretionary PMS, with a minimum investment of $75,000, operates like an actively managed fund. The non-discretionary PMS is aimed at investors who already hold overseas portfolios and want advisory and operational support.

“The investment part is one, but the compliance part, the tax part, the operations part is still quite tough for individuals,” Parikh said.

He clarified that PPFAS has not always been focused only on US technology stocks. In its early years, the firm invested in multinational parent companies such as Suzuki, Nestlé, 3M, Anheuser-Busch and British American Tobacco, often because Indian subsidiaries traded at higher valuations.

Today, the firm holds Microsoft, Google, Meta and Amazon in its flexicap fund but cannot increase exposure further due to regulatory limits. PPFAS also invests outside the US, including in Europe, with holdings such as Unilever.

Home Bias, Tax Efficiency And Operational Reality

Parikh addressed home country bias, drawing a parallel with travel behaviour.

“Even when we go abroad for a holiday, after four or five days people want comfort food,” he said.

To counter this bias, PPFAS focuses on globalised businesses with diversified revenue streams. Companies like Google and Microsoft generate only 30–40% of revenues from the US, reducing reliance on any single market.

He then explained why actively managed GIFT City retail funds face structural challenges. Unlike Irish-domiciled UCITS structures, GIFT City funds currently trigger taxes on every transaction. Short-term gains and dividends are taxed at 42.7% at the fund level, while long-term gains are taxed at an effective rate of about 14.95%.

This discourages portfolio churn, especially in the first two years. The workaround is to route investments into funds domiciled in Ireland or Luxembourg, where trading does not trigger Indian taxes until redemption.

“That’s how mutual funds in India work, and that’s what we’re trying to replicate overseas,” Parikh said.

Operationally, he cautioned that GIFT City investing is still evolving. Processes are not fully digital, paperwork is extensive, and the full process can take 10–15 days. Many investors drop out midway.

Uncertainty, AI And Why Risk Matters More Than Timing

Addressing geopolitics, leadership changes and artificial intelligence, Parikh said uncertainty is permanent.

“Uncertainty is definitely there. It’s always been there and it’s going to continue being there,” he said.

He warned against chasing hot sectors, drawing parallels with telecom and airlines in the 1990s, where excessive competition destroyed returns for decades before consolidation restored profitability.

For him, overseas investing is primarily about managing risk.

“Putting at least 20–25% of your equity portfolio abroad reduces risk considerably,” he said.

On gold, he reiterated that it should not exceed 10% of a portfolio and cannot be fundamentally valued, despite recent gains driven by central bank buying.

Making Global Investing Accessible To Individuals

Subho Moulik, founder of Appreciate, concluded the discussion by focusing on direct global investing.

“If I told you that you should only invest in the company you work for, you’d probably tell me I’m crazy,” he said.

He pointed out that India’s inflation has historically exceeded US inflation, leading to average rupee depreciation of 3.5–4% annually. Even holding dollars without investing would have generated returns over time.

Moulik explained that Appreciate operates as a GIFT City broker with fully digital onboarding and is regulated as a SEBI RIA, IFSC broker, payment service provider and distributor. US assets are held with mandated custodians rather than demat accounts, the LRS limit remains $250,000 per year, and new investors should prioritise index exposure.

Last year, indices delivered around 18%, individual stocks up to 40%, and sectoral ETFs 20–25%, though he cautioned that such returns are never guaranteed.

The Core Takeaway

Across the stage, the message was consistent. Global investing is not about abandoning India or chasing the next winning market. It is about recognising currency risk, respecting market cycles, and building portfolios designed to endure and compound over time.