Welcome to the final frontier. We have journeyed from the basics of Currency Risk to the complexities of Geopolitics. We have explored the tech giants of the Nasdaq and the resource giants of the Commodity world. We have learned the "How" (LRS/Feeder Funds) and the "Why" (Diversification).
Now, it is time to build. In this capstone module, we will synthesize everything into a cohesive strategy. We will answer the most pressing question: "How much of my portfolio should be international, and what exactly should I buy?"
Step 1: The Allocation Decision
Investing 100% globally is risky (currency volatility). Investing 0% globally is risky (single-country risk). The sweet spot lies in the middle.
The 20-30% Rule:
For most Indian investors, allocating 20% to 30% of their equity portfolio to international assets is optimal.
• Why not more? You live in India. Your expenses are in Rupees. If the Rupee appreciates (rare but possible), a heavy global portfolio drags your net worth down.
• Why not less? Anything less than 10% doesn't move the needle. You need enough exposure to benefit from the Dollar hedge.
The Global Portfolio Pyramid
Step 2: Choosing Your Vehicles (ETFs)
Do not try to pick individual winners (like just buying Tesla). Use the "Core and Satellite" approach we learned in the Portfolio Management course.
The Core (Stability)
This should be broad-based ETFs that capture the entire market.
• S&P 500 (VOO): The default choice. Safe, reliable, US-centric.
• Nasdaq 100 (QQQ): If you want higher growth and believe in Big Tech.
• Total World Stock (VT): If you want to own US + Europe + Asia in one ticker.
The Satellite (Alpha/Protection)
This is where you add flavor.
• Gold (GLD): For crisis hedging (5-10%).
• Semiconductors (SOXX): To play the AI boom.
• China/Emerging Markets (VWO): For contrarian value plays.
Step 3: Sample Portfolios
Here are two templates based on risk appetite. Adjust the percentages based on your personal financial plan.
Focus on high-growth regions. Accepts volatility for maximum returns.
Focus on stability. Uses US markets as a Dollar Hedge and Gold as a crisis hedge.
Step 4: Implementation Strategy
How do you actually buy these?
Use Feeder Funds. The wire transfer fees ($10-20 per transaction) of the LRS route will eat up your capital. Stick to Indian Mutual Funds like Motilal Oswal Nasdaq 100 FoF or Navi US Total Stock Market FoF. It is cost-effective despite the higher tax.
Use LRS (Direct US Broker). Open an account with Vested/IndMoney. Remit money in bulk (e.g., ₹2-3 Lakhs at a time) to minimize fixed costs. You benefit from the lower expense ratios of US ETFs (0.03%) and better taxation (12.5% LTCG) over the long run.
Step 5: Rebalancing (The Maintenance)
Global portfolios drift. If the Rupee crashes from ₹83 to ₹90, your US portfolio value will spike in INR terms.
Strategy: Check your portfolio once a year. If your Global allocation (target 20%) has grown to 25% due to Rupee depreciation or a Tech bull run, sell some US assets and buy Indian assets. This forces you to "Sell High (Dollars)" and "Buy Low (Rupees)."
Final Words
You have now completed the Global Investing Course. You are part of the elite 1% of investors who do not have "Home Bias." You understand that opportunity is borderless.
Investing globally is not about abandoning your home country; it is about securing your financial future against risks you cannot control (like currency devaluation or local inflation). It transforms you from a local saver into a Global Capitalist.