A 2023 roadmap for international investors

Mind the bump! Overcome that and it should help you in the long run

The last three years have been one helluva ride for international investors. From global pandemic to stellar bounceback, regulatory run-ins to steep correction, we have seen it all. If that wasn’t enough drama for you, this year promises to roll out a nail-biting climax on interest rate hikes and recession fears in the US. So, what should international investors do? Let’s run you through the paces by explaining what’s happened in the past couple of years and what the future holds.

Not getting the rub of the green
International mutual funds saw a massive inflow in the post-Covid era. It was not a sudden awakening to geographical diversification but an opportunity to ride the bull rally, driven mainly by US tech stocks. This was the time when the Indian market was underperforming its global peers.

But the tables turned in 2022. The domestic market flexed its muscle this time; by contrast, most international indices were getting trounced. Unfortunately, just when these battered foreign stocks were ripe for investment, the door was slammed on Indian investors due to SEBI’s investment restrictions. By February 2022, most of the international funds had stopped accepting any investments.

In a slump
After a stellar 2020-21, investments in international funds have fallen due to investing limits and uninspiring foreign markets.

AMFI data on FOFS investing overseas. Doesn't include international index funds and ETFs that directly invest in foreign stocks.