India Mutual Funds - A Possible Bargain?

The mutual funds in the well developed countries rare can achieve very hot results. Of course there are winners who can outstrip the others with risky strategies. But in general the mutual funds grow depends on the economic grow in the given country. How much are the economies in USA, UK and the EU growing? They are stable and grow slowly. Most East Europe countries are an exception of that rule, but even there the situation is getting very close to the rest of the Western world.

Why not look at East? Asia has always been able to surprise when it comes to Economy. Remember the Japan's economic wonder and the Asian tigers. There is a lot more to expect from this part of the world.

Why India

India is the second largest country in the world with population of more than one billion. Unlike China, India is a democratic country free of political limitations. And unlike in China, whose economy is currently in its picks, the Indian economical bang is just starting right now.

What's better investment target than a fastly growing country with huge market, English speaking population and great geographical datum? India hides a lot of opportunities, but also a lot of risk.

If you try to play the Indian stock market yourself, you may meet unpleasant surprises due to not so well known factors which determine that market. That's why the Indian mutual funds are diversifying their investments within many stocks and options for you.

Mutual Funds in India

There are a lot of offerings available on the Web. However many of them, or the bank accounts which are offered together, are available only for Non-resident Indians (NRIs). You may need to research more before you find attractive funds available for foreigners.

Later in this article I will suggest you few funds and few places to look at. Read on.

What ROI You Can Expect?

To answer this I must have a crystal ball. The Indian market is still rather volatile and it's better not to have specific expectations. But of course the past results can give you some rough idea.

As you can see from the stats here, the top Index and Diversified funds can achieve close to 50% for an year (the average is lower though). Some funds have exceeded these figures for one year, but also not averagely.

The Association of Mutual Funds in India is giving some very detailed information about the performance of the funds and more. Don't forget that there is more to expect from the Indian market so the ROI-s can go up even further.

How to Invest in Indian Mutual Funds

The first question I would ask is If to invest in Indian Mutual Funds. From what was said above you have probably assumed the answer is "yes". But you must understand there are still many risks - the funds from India may be affected by various world events, as well as political and economic changes that are beyond your control. You must be prepared for higher risk than the one you take when investing in local funds.

After obtaining all the needed information, you can go ahead and start action. You can visit sites like MorningStar.com and research for mutual funds in India. Obtain the prospects - they contain all the information you need about how to sign the contract, how to transfer the funds etc. Read them carefully.

It's a good advice to ask your brocker or financial advisor for help. They can save you from bad and costy mistakes.

Where to Find Indian Mutual Funds?

Of course the advice to use your favorite search engine is always valid. However you should be careful when following some stranger's recommendations (including mine), which you will find on blogs and sites - unless you know what the author is experienced in investing in India.

Whatever mutual fund you find via the Internet, make sure to research it thru some of the big sites which provide accurate and up-to-date information. Such resources are MSN Money Mutual Fund Research, MorningStar or Value Research.

Some well known Indian mutual funds are:

GIC Mutual Fund (no website)

Chola Mutual Fund (no website)

Morgan Stanley Growth Fund

Kotak Mutual Fund

Sahara Mutual Fund

Birla Sun Mutual Fund

... and many more.

One site where you can find a lot more information on this topic is Mutual Funds India.

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User comments:

Khalid Al-Duaij at Nov, 14 '07 11:57
I have been trying to invest in the Indian Stock Market for the past 3 months but I have only been running into dead ends cause all the Broker companies keep telling that you must be of indian origin or a non-resident indian. Is there any other way to enter the indian stock market if i am neither.
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