As Indian markets witness a phase of increased volatility after a strong 18-month run, investors are once again reminded of the importance of diversification. Mirae Asset Investment Managers (India), recognizing the rising need for global exposure, has launched the Mirae Asset Global Allocation Fund IFSC — a new outbound investment fund through GIFT City (Gujarat International Finance Tec-City).

This strategic move aims to empower Indian investors with access to global investment opportunities and high-growth themes like Artificial Intelligence (AI), semiconductors, electric vehicles (EVs), and blockchain — sectors with limited domestic exposure.

Why Launch a Global Fund Amid Global Volatility?

According to Vaibhav Shah, Head - Products, Business Strategy & International Business at Mirae Asset Investment Managers, the primary reason for launching this fund is to enable diversification. Indian investors have been restricted from investing in overseas mutual funds since February 1, 2023, due to regulatory limits. This severely limited access to global assets, particularly at a time when other asset classes like gold and fixed income are also showing solid performance.

Despite Indian equities performing well, the market has become unpredictable. Predicting which asset class will outperform is a challenge. This makes diversification across global markets not only advisable but essential.

Shah also emphasized that US markets have outperformed Indian markets by 5–6% in dollar terms over the past 15 years. This justifies Indian investors gaining global exposure, especially in high-performing sectors not easily available in India.

Structure and Strategy of the Mirae Asset Global Allocation Fund IFSC

The fund is structured as a Category III Alternative Investment Fund (AIF) and launched through the GIFT City route. It is accessible to resident Indians, companies, NRIs, and foreign nationals through the Liberalized Remittance Scheme (LRS).

Portfolio Allocation

• 90–100% of the fund will be allocated to global ETFs and offshore funds.

• The portfolio is designed with a Core + Tactical strategy:

  • Core Component (50–70%): Focused on developed markets, especially the United States, which accounts for:

    • 25% of Global GDP

    • 65% of MSCI World Index

    • 50% of Global Market Cap

  • Tactical Component (30–50%): Focuses on emerging markets (like China, Taiwan, and Brazil) and themes such as:

    • Artificial Intelligence (AI)

    • Semiconductors

    • Electric Vehicles (EVs)

    • Blockchain

The fund will dynamically allocate across 3–5 underlying funds, allowing it to pivot according to market conditions and exploit global opportunities as they arise.

Managing Volatility Through a Staggered Investment Approach

To mitigate the impact of market swings, Mirae Asset plans to use a staggered drawdown approach, raising capital from investors over 12 months rather than all at once. This enables:

• Cost averaging

• Taking advantage of market dips

• Giving time for investment themes to play out

The recommended investment horizon is 3–4 years, which aligns well with how emerging technologies and sectors mature over time.

Benefits for Indian Investors Through the GIFT City Route

Indian investors face limited options for global investments due to regulatory caps. The three main options are:

1. Directly investing in global stocks or ETFs

2. Using offshore brokerage platforms

3. Investing through structured funds like this new AIF

While the first two methods involve high transaction fees, currency risks, and the difficulty of selecting suitable assets, the GIFT City AIF route offers a simplified, cost-effective, and professionally managed alternative.

With Mirae Asset’s global presence across 19 countries and over $250 billion in assets under management, Indian investors benefit from:

• Expertise in international portfolio management

• Ease of access to high-potential themes

• Risk mitigation through diversified exposure

Who Can Invest and How Much Is Required?

This is not a retail product. The minimum investment ticket size is $150,000, in line with the regulations for Category III AIFs.

Key Point:

This fund is not a replacement for mutual funds, but a complementary product meant for sophisticated investors who understand volatility and are looking for strategic international exposure.

Retail-friendly products via GIFT City may follow in the future, but this fund primarily targets HNIs and serious investors looking for diversified global exposure with professional fund management.

Why Don’t More AMCs Launch Outbound Funds in GIFT City?

Two major challenges are holding other Indian AMCs back:

1. Lack of Global Expertise: Many Indian AMCs focus on inbound India-centric funds, lacking experience in managing international portfolios.

2. Time to Market: Launching a fund is a time-consuming process. Mirae Asset first launched its inbound fund 8–9 months ago, followed by this outbound initiative.

Due to its global network and infrastructure, Mirae Asset can support both inbound and outbound investment strategies effectively — a capability not all Indian AMCs currently possess.

What About Distribution?

Indian distributors — whether located in GIFT City or elsewhere in India — can help investors access this fund.

• Those in GIFT City must comply with IFSCA’s code of conduct and benefit from tax incentives, including:

  • 10-year tax holiday on business income (out of 15 years)

• Distributors outside GIFT City can still partner with Mirae Asset and follow existing regulatory norms, without getting physical infrastructure inside GIFT City.

This opens doors for more distribution channels to offer global investment solutions without complex overheads.

Final Thoughts: Why This Fund Matters Now

The Mirae Asset Global Allocation Fund IFSC is a timely solution for Indian investors seeking:

• Diversified, theme-based global exposure

• Professionally managed investment

• Access to developed and emerging markets

• Relief from domestic market volatility

As global disruptions continue to shape the financial landscape, Indian investors can no longer afford to remain insulated. GIFT City’s evolving ecosystem provides the perfect platform for such next-generation investment opportunities.

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