The S&P 500 Index is a market-cap index that holds 500 of the most liquid large-cap companies from the US stock market. This index fund holds almost 82% of the US market capitalization. The top sectors included in the funds are health care, communication services, financials, information technology, and consumer discretion.
Many Indian investors are beginning to understand the value of investing in international funds. Along with this, many fund houses have begun providing these schemes which invest in the overseas market. Motilal Oswal has provided the provision of investing in the Motilal Oswal S&P 500 index fund that invests in the companies included in the fund in the same proportions.
Reasons why investing in the Motilal Oswal S&P 500 Index Fund is beneficial:
1. An Indian investor whose investment portfolio consists of mainly investments from the Indian market, Motilal Oswal S&P 500 Index Fund is an excellent way to introduce diversification. A diversified portfolio can be quite beneficial as it will help the investor spread out the risk and maintain a balance in the investments.
2. Motilal Oswal has mentioned that the earnings from this index fund are denominated in dollar terms. Hence, Investors from India making mutual funds investments in the fund will benefit from the rupee depreciation against the dollar.
3. Almost 40% of the S&P 500 Index's sales come from the rest of the world, providing their investors with global exposure rather than a single country's exposure.
However, the investment in these international funds must be made after careful consideration. Along with this, the investment portfolio shouldn't hold a major portion of international funds. This is because any volatility and disruption in international funds may throw the investor's portfolio off balance.