Rs. 100- Rs. 10 crore
Start investing with Rs. 100 | Easy KYC | Expert-managed funds
How to Invest in US Mutual Funds
In summary
Indian investors can gain exposure to US markets through India-based mutual funds, including eligible Fund of Funds, or through direct overseas investment routes.
- An India-based Fund of Funds can provide indirect US market exposure.
- Direct overseas investing follows a different regulatory process.
- Currency movements can affect your returns in rupees.
- KYC is required for applicable mutual fund investments.
- The LRS limit is USD 250,000 per financial year for permitted remittances.
- Tax treatment depends on the investment structure and applicable rules.
- The Bajaj Broking website offers access to 4,000+ mutual fund schemes.
US-focused investments can add geographical exposure to a portfolio, but they also introduce currency, market, regulatory, and tax considerations.
How can you invest in US mutual funds from India?
One way to access US markets is through an India-based mutual fund structured as a Fund of Funds (FOF). A Fund of Funds invests in other funds rather than directly investing only in individual securities. You can read more about types of mutual funds to understand how different mutual fund structures work.
A US-focused FOF may invest in overseas mutual funds or ETFs that provide exposure to US companies or indices. This means you invest in the Indian FOF rather than directly purchasing the underlying US fund.
Another route is investing directly in eligible overseas securities through an applicable platform. This route can involve different account, remittance, tax, and regulatory requirements, so it should not be treated as identical to investing through an Indian mutual fund.
How does a US-focused Fund of Funds work?
A Fund of Funds pools money from investors and invests it in other funds. A US-focused FOF may therefore provide indirect exposure to the US market through an overseas fund or index-based investment.
For example, suppose Rohan already has Indian equity mutual funds and wants some exposure to US companies. He could consider a US-focused FOF available through an eligible Indian platform. Before investing, he reviews the FOF's investment objective, underlying holdings, costs, currency exposure, and risk level. He also considers whether the additional US exposure fits his existing portfolio.
The mutual fund or index fund chosen by an FOF can affect its portfolio and performance. The NAV of the FOF reflects the value of its underlying investments, expenses, and applicable market and currency movements.
What steps should you follow before investing in US-focused mutual funds?
The exact process can vary by the investment route, platform, and scheme. If you are investing through an India-based FOF, the following steps can help you assess the investment:
- Complete KYC: Ensure your mutual fund investments and KYC requirements are in place.
- Choose the fund: Choose a mutual fund based on its objective, portfolio, costs, and investment approach.
- Assess risk: Review the fund's risk profile and understand the risks involved.
- Choose an investment method: Where available, you can invest through Systematic Investment Plan or lumpsum.
- Review the investment: Track your mutual fund's performance and review whether it continues to fit your portfolio.
You do not necessarily need a demat account simply because a mutual fund invests overseas. The account and holding mechanism depend on the investment route and platform you use.
What are the benefits and risks of investing in US mutual funds?
US-focused investments can provide geographical diversification by giving you exposure to markets outside India. They can also provide access to companies and sectors that may not be represented in your domestic portfolio.
However, international investments have additional risks. The various risks involved with mutual funds can include market risk, while overseas investments also involve currency and country-specific considerations.
Currency risk: Suppose a US investment remains unchanged in US-dollar terms. If the US dollar strengthens against the rupee, its value in rupees may increase. If the rupee strengthens, the rupee value may fall even when the underlying investment has not changed.
Regulatory and market risk: Changes in overseas regulations, economic conditions, interest rates, or market sentiment can affect the underlying investments.
Liquidity: Redemption timelines and liquidity can vary by scheme and its underlying investments. Check the scheme documents before investing.
Costs: Compare the fund's expense ratio and other applicable charges. International structures can involve costs at more than one level.
What should you know about LRS and taxation?
The RBI's Liberalised Remittance Scheme (LRS) allows eligible resident individuals to remit up to Rs. 2.39 crore per financial year for permitted current or capital account transactions, subject to applicable rules. This limit is relevant when you make an eligible overseas remittance; it should not automatically be treated as a personal limit for investing in an India-based mutual fund or FOF.
Tax treatment depends on the structure of your investment, the nature of the income or capital gain, and the tax rules applicable at the time of the transaction. The existing page's earlier 12-month, 15%/20%, indexation, and dividend-TDS statements should not be relied on as current generic rules.
Before investing or redeeming, check the latest income tax guidance and consider professional tax advice where necessary.
Who may consider investing in US-focused mutual funds?
US-focused mutual funds may be relevant if you want geographical diversification or exposure to overseas companies and markets. They may be considered alongside your existing investments rather than as a replacement for them.
Before investing, consider:
- Your financial goals
- Your investment horizon
- Your risk tolerance
- Your existing exposure to Indian and international markets
- Currency fluctuations
- Costs and taxation
- The specific fund's investment objective
There is no single US mutual fund that is suitable for every investor. Your decision should be based on the characteristics of the fund and how they fit your circumstances.
Conclusion
Investing in US-focused mutual funds can provide geographical diversification and exposure to overseas markets. An India-based Fund of Funds is one route, while direct overseas investing follows a different process and regulatory framework.
Before investing, understand the fund structure, underlying investments, currency risk, costs, taxation, and applicable rules. Most importantly, consider how the investment fits your existing portfolio and financial goals.
Last reviewed September 2026
Mutual funds are subject to market risk. Please read the scheme-related documents carefully before investing.
Explore Investment Tools
Articles and Insights
Frequently Asked Questions
Investment routes
Comparing funds
Practical considerations
Can Indian mutual funds invest in stocks listed on the US stock market?
Yes, Indian mutual fund schemes can have overseas exposure, subject to applicable regulations and the scheme's investment objective. Some schemes may invest directly in permitted overseas securities, while others may invest through overseas funds or ETFs. Check the scheme documents to understand exactly where your chosen fund invests.
Can I invest in US mutual funds through an SIP?
You may be able to invest through an SIP when the relevant India-based mutual fund or FOF offers that facility. An SIP is an investment method that allows you to invest a fixed amount at regular intervals. Check the specific scheme and platform for the available investment modes.
Which is the best US mutual fund for Indian investors?
There is no single best US mutual fund for everyone. Compare the fund's objective, underlying investments, costs, risk profile, currency exposure, and investment horizon. You should also consider how the fund fits with your existing portfolio rather than assessing it only on past performance.
Can you invest in US mutual funds from India online?
Yes, eligible platforms can allow online investment in certain international mutual funds or India-based FOFs. Before investing, check the scheme's availability, KYC requirements, investment method, applicable tax rules, and any relevant overseas investment or remittance requirements.
Disclaimer
Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319
BFL does NOT:
(i) provide investment advisory services in any manner or form.
(ii) carry customized/personalized suitability assessment.
(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.
In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.
Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.
Disclaimer on Risk-O-Meter:
Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.
Disclosure: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.
Disclaimer
Bajaj Finance Limited ("BFL") is an NBFC offering loans, deposits and third-party wealth management products.
The information BFL contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.
This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.
Disclaimer
Mutual Fund SIP calculator may provide potential investors an approximate estimate on the maturity amount of the monthly SIP, purely based on mathematical calculation of the projected annual return rate selected by investor. However, such calculation does not factor the actual performance by the Asset Management Company (AMC) and should not be treated as any advice or assurance about the actual return of investment. Mutual Funds do not have a fixed rate of return and it is not possible to predict the rate of return. Please note that the SIP calculator are for illustrations only and do not represent actual returns which may vary depending on various factors including but not limited to actual performance, expense ratio, taxation, exit load (if any), etc.