Overseas investors lose up to 50% in India funds

The speculation over the stock market is uncertain. An investor knows that the investment involves risk factor, in order to gain good study of market, trading factors are essentials. If the speculation proves correct then there will gain, but fails there may be loss instead. However, in the case of investment from offsore plays important role in determining the fate of stock boom and trading. This may not be effective everytime, sometimes the stock market reaction would prove worse for investors including offshore. What could more be expected from the stock market, when the economy is under inflationary pressure of around 12 per cent and the decline in the value of dollar against rupees. The curreny fluation is the bigest factor that has been affecting the trading and the international crude oil is among other major factors.

Unlike in the previous years, Indian equities have not paid off for overseas retail investors. The year so far has not been very good for India-dedicated offshore funds, as most of their investments have eroded by 40-50% over the past seven months, according to media reports. Offshore funds specialise in investing in foreign companies or corporations. These funds have non-residential investors (often high net worth investors and institutions) and are regulated by the provisions of the foreign countries where these are registered. As per international fund ratings major, Morningstar’s rating log, the average year-to-date return (as on July 31, this year) of India-dedicated equity funds is as low as -39% (when converted to US dollars). According to experts, a reason for this could well be the fact that offshore funds only invested in liquid large-cap stocks, a segment that led the market fall in the initial months.