Global Investing · LRS · Currency Diversification

Your portfolio is 100% rupee.
Here is what that is quietly costing you.

The rupee has lost ~3.5% of its value against the dollar every year for the last decade. An Indian investor who held only Nifty earned good returns in rupees — but lost ground in real purchasing power terms. Here is how to think about it, and what you can actually do.

₹55 → ₹84
USDINR: 2014 to 2024
~3.5%
Avg annual INR depreciation vs USD
$250,000
LRS limit per year per person
How diversification would have changed your returns
Compare a 100% Indian equity portfolio vs a blended portfolio over the last 3 years. All values in Indian rupees.
Portfolio diversification impact calculator
Investment amount (₹)
% in Indian equity (Nifty)
70%
% in US equity / Intl Fund
20%
Rest in Gold ETF / SGB
100% Indian equity
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Blended portfolio
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Difference
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100% Nifty 50
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Blended portfolio
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S&P 500 (via Intl Fund)
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Gold ETF
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Adjust the slider to see how diversification changes your outcome.

Based on approximate 3-year CAGR (FY2022–FY2025): Nifty 50 ~17% p.a. in INR, S&P 500 via Indian FOF ~22% p.a. in INR (USD returns + INR depreciation), Gold ETF ~18% p.a. in INR. These are historical category averages — past returns do not guarantee future performance. This is educational — not personalised investment advice.

How Indian residents can invest globally
Three practical routes — each with different complexity, cost, and suitability.

Route 1: International Fund of Funds (Simplest)

  • Buy via any Indian MF platform (Zerodha, Groww, INDmoney)
  • Works like a regular Indian mutual fund — SIP, lump sum, NFO
  • No LRS limit, no TCS, no foreign account, no ITR Schedule FA
  • NAV in INR — you automatically get the currency impact
  • Holding >24 months: LTCG at 12.5%

Examples: Motilal Oswal NASDAQ 100 FOF, Franklin Feeder US Equity, Mirae Asset S&P 500 ETF FOF

Route 2: Direct US Stocks via LRS (Most control)

  • Open account on Vested, INDmoney, or Interactive Brokers India
  • Remit via LRS — up to $250,000/year per person
  • 20% TCS collected upfront (claim back in ITR)
  • You own the actual US stocks — fractional available
  • Must disclose in Schedule FA of ITR-2/ITR-3

Platforms: Vested Finance (~0.5% fee), INDmoney (zero brokerage), Interactive Brokers India (most features)

Route 3: Gold ETF / SGB (Currency hedge without equity)

  • Gold prices globally are USD-denominated — INR depreciation = automatic gold price rise
  • SGBs: sovereign guarantee, 2.5% annual interest, zero capital gains tax at maturity (8 years)
  • Gold ETF: more liquid, bought and sold on NSE like a stock
  • Not equity — behaves differently in market crashes (typically rises when equity falls)

Note: SGBs are the best option if you can commit 8 years and want the interest income. Gold ETFs if you need liquidity.

What is NOT worth doing yet

  • EUR/AUD/JPY exposure — no simple direct route for Indian retail. European ETFs available via some platforms but complex. JPY essentially inaccessible.
  • Forex trading (MCX/NSE currency futures) — speculative, not suitable for wealth building
  • Crypto as currency diversification — extreme volatility defeats the purpose of a currency hedge

For most retail investors, US exposure (via FOF or LRS) + gold covers the practical currency diversification toolkit.

Platform comparison for LRS-based investing
Platform Fee Minimum TCS handling SEBI registered Best for
Vested Finance 0.5% on transactions, $3/month subscription option $1 (fractional) Auto-collected, Form 26AS updated Yes US stock picking, ETFs, fractional
INDmoney Zero brokerage, forex conversion fee applies $1 Auto-collected Yes Beginners, zero brokerage, simple UI
Interactive Brokers India $0.005/share (min $1), very low for large amounts $0 (no minimum) Manual — you handle compliance Yes Sophisticated investors, global markets beyond US
Indian FOF via Zerodha/Groww 0.5–1.5% TER (fund expense ratio) ₹500 SIP Not applicable (no LRS used) Yes (SEBI MF) SIP investors, avoid LRS complexity
Tax implications at a glance

International Fund of Funds (India-domiciled)

  • Held > 24 months: LTCG at 12.5% (no indexation)
  • Held < 24 months: added to income, taxed at slab
  • No TCS, no Schedule FA, no foreign asset disclosure

Direct US stocks via LRS

  • 20% TCS on remittance — refunded via ITR
  • Held > 24 months: LTCG at 20% (no indexation from Budget 2024)
  • Held < 24 months: income slab rate
  • Dividends: 25% withheld in US, credit in India via DTAA
  • Mandatory Schedule FA disclosure in ITR

Want to know how much global diversification suits your portfolio?

The right allocation depends on your existing portfolio, tax bracket, risk profile, and investment horizon. A 30-minute conversation can give you a specific answer.

This page is for educational purposes only. Returns shown are historical averages and do not guarantee future performance. Tax treatment described is based on applicable rules as of FY2024-25; consult a chartered accountant for personalised tax advice. LRS is subject to RBI regulations and may change. mywealth.fit is a SEBI Registered Investment Adviser (registration pending).

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