What are International ETFs? Types, Benefits & Risks explained
Introduction
You may be perfecting Indian equities, but what if your portfolio could benefit from the next U.S. technology boom or European green energy trend? That's the role of international ETFs. It allows you to own a piece of the world, and trade it right here on the NSE and BSE like just another share. International ETF funds offer you exposure to diversification and growth beyond India.
How International ETFs Work for You
Imagine buying one unit of a top-rated International ETF, and that one unit gives you exposure to dozens of global giants. Specifically, international ETFs are funds that track an overseas index (for example, the innovators and disruptors of the Nasdaq or blue-chippers of the S&P 500). Your fund will mirror the index and will hold stocks in the same proportions. International ETFs are traded live with market hours; hence, you can 'buy' and 'sell' when you want to.
Most are passively managed, slashing costs (expense ratios often below 0.6%). As an investor, you gain USD exposure; if the rupee dips 5%, your gains amplify on conversion. All you need? A demat account and a SEBI-registered broker. No foreign brokerage, no paperwork chaos.
Get instant access to markets—Open Demat account
Types of International ETFs to Match Your Goals
Not all top-rated international ETFs are equal. Pick the type that fits your risk and vision:
Mix a tech sectoral ETF with a bond fund, and you balance growth and safety.
Why Add International ETFs to Your Portfolio Now
You’re not just diversifying, you’re futureproofing. International ETF funds shield you when India cools: a domestic slowdown won’t tank your entire wealth. In 2025, U.S. AI and Asian semiconductor cycles are accelerating, sectors that India can’t fully match.
Convenience is king. Skip stock-picking abroad; one ETF delivers 50–100 global names. Low fees mean more compounding.
Risks You Must Watch in International ETFs
Global doesn’t mean risk-free. Currency fluctuations can be damaging, for example, if the USD increases in value by 8% but the ETF increases in value by only 6%, a conversion would result in a loss. Geopolitical shocks (e.g., trade bans, elections) can have even larger negative effects on investments held in international markets.
Country risks matter: A U.S. recession drags your S&P ETF.
Regulatory caps: SEBI’s overseas investment limits can pause inflows. Liquidity gaps? Thinly traded funds may trade at premiums.
Tax complexity adds up: short-term gains (<24 months) hit your slab rate; long-term gains are at 12.5%.
Your fix: Cap exposure at 15% of portfolio. Use SIPs. Track NAV daily.
Some steps to follow on how to start investing in International ETFs from India
2. Find a list of international ETFs within the NSE/BSE platforms.
3. Filter by AUM, returns, and expense ratio.
4. Place limit orders, units credit instantly.
5. Set SIPs for rupee-cost averaging.
6. Monitor via apps; rebalance yearly.
The Top-Rated International ETFs for Indian Investors
If you are wondering what the best international ETFs are? In 2025, two stand out:
There is Motilal Oswal Nasdaq 100
ETF: Tracks 100 U.S. non-financial leaders.
AUM: ₹10+ crore.
1-year return: ~25%+.
Expense: 0.58%. Your tech growth engine.
Motilal Oswal S&P 500 ETF: Mirrors America’s top 500 firms.
5-year average: 17%. Perfect for steady equity exposure.
Both provide tightly tracking, high liquidity, and rupee-hedged upside.
Your Global Portfolio Awaits
International ETFs aren’t extras; they’re essentials for 2025’s smart investors like you.
You reduce home bias, capture global trends, and sleep better during local crashes. Start small, diversify types, and let compounding cross borders. With Motilal Oswal’s top-rated international ETFs, your wealth isn’t just growing, it’s going global. Ready to build your international ETF list? Your first unit is one click away.
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