Is it a good time to allocate to US focused MFs?

International funds which were the toppers in the last one year have started seeing correction in the near term. Many international funds, especially those investing in US equities have fallen to the negative return space in the last one month. Fund managers believe that the correction is a good time to enter these funds and believe that the outlook for US funds remains positive in the long term. Radhika Gupta, MD & CEO, Edelweiss AMC, said that this correction can be a good opportunity of Indian mutual fund investors. "US Equity, specially growth oriented sectors like tech, saw some correction in the last few weeks owing to rising bond yields in the US. Rising yields usually triggers a fall in high growth stocks as they become relatively less attractive when yields rise. This may keep US stocks on the edge with some added volatility. However, the long term prospects of US stocks, especially ones in the tech sector, remains attractive. These corrections are very good opportunities to invest for those who missed the recent rally."Among the international fund category, 19 schemes have delivered negative returns in one month. Most of these schemes invest in the US market. The international fund category has delivered an average return of 0.28% returns in the last one month. Good schemes like like PGIM India Global Eqt Opp Fund, Edelweiss US Technology Equity FoF and Franklin Feeder Franklin US Opp Fund are all on the bottom of the return chart in one month:Scheme name1-month returns (%)1-year returns (%)PGIM India Global Eqt Opp-6.4641.27Edelweiss US Technology Equity FoF-4.7149.31Franklin Feeder Franklin US Opp-3.4328.36Motilal Oswal Nasdaq 100 FOF-3.3537.96Kotak Nasdaq 100 FOF-3.02 Financial planners believe that international equities have seen a sharp run up in the past, especially the tech stocks. They say that if investors have the risk profile, this is a good time to start your SIPs. However they believe that investors with a conservative or moderate risk profile, you shouldn't jump the gun. "The US markets have run-up sharply. Especially the tech pack. I believe it's good for serious long term investor to remain invested as it gives diversification in terms of currency, economy and the US is undoubtedly the world leader. However, you should always remember that in near term there could be volatility hence, invest with at least 5 years time horizon in these schemes," says Neeraj Chauhan, CEO, The Financial Mall.

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