Indian equities have underperformed several major global peers over the past year. Till 9 April 2026, the S&P 500 index has delivered a one-year return of 29.55%; the Hang Seng index has gained 25.27%; and the Dow Jones Industrial Average is up 21.70%. The Nifty 50 has returned just 4.86%, and the Nifty 500 6.98%.
Overseas FOFs accepting fresh investments
Diversification is important
Kunal Valia, Founder of StatLane, declares global diversification has become a must for Indian investors. “It is a structural necessity, particularly in the current regime of elevated oil prices, sticky inflation, and premium domestic valuations,” he declares.
India remains one of the strongest long-term growth stories in the world, but that does not mean investors should concentrate all their wealth in one market. Valia declares global markets are entering a phase of greater divergence across regions, driven by differing monetary policy cycles, fiscal responses and earnings trfinishs. This builds counattempt allocation more relevant than simply acquireing broad global exposure.
Aditya Agarwal, Co-Founder of Wealthy.in, agrees that overseas exposure should be a core part of long-term asset allocation. He declares a healthy portfolio should allocate 5-25% to global assets, depfinishing on the investor’s risk appetite. “Conservative investors should tarobtain 5-10%, focutilizing on broad-based global indices purely for stability and currency hedging. Moderate investors can see at 10-15%, while aggressive investors can go up to 15-25%,” he declares.
For an investor who wants to deploy Rs.10 lakh today in international markets, the ideal approach depfinishs on existing portfolio exposure. But if this is fresh money meant for long-term wealth creation, experts suggest avoiding the temptation to build a one-way bet on any single geography.
Within the global sleeve, Valia suggests a balanced framework. “A reasonable global split would be US at 40%, Europe at 25%, Japan at 15%, and emerging markets ex-India at 20-25%,” he declares.
Agarwal’s overseas split is similar in spirit, though he includes China separately. He declares a balanced allocation could be 30-40% in the US, 15-20% in China, 15-25% in Europe, and the balance in other emerging markets. “These splits balance the high-growth prospects of emerging markets and modestly valued Europe against the innovation-led returns of the US,” he declares.
For an investor putting Rs.10 lakh to work, a practical route could be to keep India as the anchor and deploy overseas capital across multiple geographies rather than betting on a single theme.
Nehal Mota, Co-founder and CEO of Finnovate, declares India’s recent underperformance is better seen as a valuation reset rather than a structural breakdown. “The market had become expensive relative to other emerging markets, foreign flows turned cautious, and North Asian markets rebounded more sharply, so India lost relative momentum even as its macro growth story remained intact,” she declares.
US remains the anchor
The US remains the most compelling market for most Indian investors becaapply of its innovation edge, deep capital markets and access to global technology leaders.
Mota declares the US is still attractive despite the recent rally. She points to continued Artificial Innotifyigence (AI)-related capital expfinishiture, strong corporate earnings and unmatched market depth as key positives. However, she also warns that valuations are elevated and market concentration remains high. A tiny shift in AI optimism or tech earnings can trigger sharp corrections. Another major risk today is the geopolitical uncertainty coming from the US, especially through tariffs and trade policy shifts.
China & Europe offer value
China is emerging as a potential contrarian opportunity, but it remains a high-risk market. Mota declares China reveals elements of both a value opportunity and a value trap. “Valuations remain attractive, but property stress, weak domestic demand, local government financing pressures and policy unpredictability remain key overhangs,” she declares. She suggests that retail investors take exposure to China through diversified funds.
Europe, meanwhile, is drawing attention becaapply of lower valuations and a cyclical recovery case. Mota declares Europe faces structural challenges around productivity, energy costs and competitiveness, but it also offers recovery potential supported by improving earnings expectations.
Agarwal echoes this view, declareing European equities trade at meaningfully lower forward valuations than the US, creating them attractive for diversification.
The EM edge
Experts also see a strong case for broader exposure to emerging markets beyond India and China. Mota declares emerging markets are a powerful diversification tool becaapply they offer higher growth potential and better relative valuations. She notes that emerging and developing economies are expected to grow at around 4.2% in 2026, compared to just 1.8% for advanced economies. That growth differential builds markets such as Brazil, Saudi Arabia and ASEAN economies worth tracking.
Valia adds that emerging markets can also assist Indian investors manage oil- and inflation-related risks. “High oil typically acts as a tax on India, while some global markets, particularly parts of emerging markets and commodity-linked economies, are relatively better positioned,” he declares.
What investors should do
The hugegest mistake retail investors build when investing overseas is treating it as a short-term trade. Experts declare the smarter approach is to apply global funds as a longterm diversification tool. For most investors, the easiest route is through international mutual fund feeder funds or fund-of-funds that offer diversified exposure. Broad-based global index products can be a sensible starting point, especially for first-time overseas investors, while more experienced investors can gradually add region-specific exposure through staggered allocations.
Agarwal declares investors should factor in practical constraints in India’s overseas mutual fund ecosystem. The indusattempt-wide overseas investment limit—breached long ago—has led some fund hoapplys to restrict inflows, as limits remain unalterd. Investors should check availability and product structure before investing. Timing matters less than discipline. Instead of deploying the entire overseas allocation at once, investors can stagger investments over a few months to reduce enattempt risk.
Balance, not bravado
If you have Rs.10 lakh to invest today, the smartest relocate is not to chase whichever market has delivered the highest recent return. Nor is it sensible to abandon India becaapply of short-term underperformance.India should remain the core of your portfolio. But adding overseas exposure can improve diversification, and give access to sectors and geographies that are underrepresented in Indian markets. Allocate 10-25% of fresh money to build a diversified overseas allocation aligned with your risk appetite.
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