Overseas funds

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: market. Due to all these reasons FOF is suited best for the medium risk taker. Funds that invest directly serve good for informed and keeping-tab-of-news-development investors. These funds take into consideration the company and the country aspect of direct investment overseas. There are companies globally, which have a single, niche and powerful business presence, while there are countries, which have added advantages over certain resources and hence command a good investment attraction. However, a combination of exact match of the business of the company and the niche of the country would be one of the few lucrative investment options that you can buy into. Hence, you need to choose such funds, where both these arguments work well.

About the about-to-arrives

At least nine more funds having an overseas focus are about to be launched. From these, some funds are focussed on new countries/continent like Latin America, North America, Emerging Europe, Africa, the Middle East, ASEAN (Association of South East Asian Nations) and Hong Kong. If the US problem cools off a little, among the countries, South Korea is the preferred destination where one can look at considering the valuation and fundamentals (forward P/E in single digit), suggests Devendra Nevgi.

These funds, instead of focussing on themes, have shown preference towards countries. And this approach may benefit these funds, considering that the countries chosen are new and it scores well on the principle of diversification. These countries are not the fast-growing ones but they can act as a pacifying element for investors considering that they are not as volatile to an extent the emerging markets are.

"Overseas investment is used to look for the opportunities one cannot get in the domestic market", advises Krishna Kumar Fund manager of Sundaram BNP Paribas Mutual Fund. For instance, the fertiliser sector is completely under the government in the country and it is quite liberal overseas, so the fund house can increase its exposure there.

A chunk of these about-to-launch funds follow indirect investing (fund of funds). A large part of the already-launched-funds followed indirect investing (fund of funds) and as the commodity markets demonstrated a solid bull-run, a greater part of these funds focussed on the commodities, metals and the infrastructure themes.