Indian investors are increasingly allocating funds to global equities, with assets under management (AUM) in India-domiciled funds focused solely on these investments rising over six-fold in five years. As of May 2026, the AUM reached ₹98,182 crore, up from ₹15,955 crore in December 2020, according to Morningstar Investment Research India. This surge reflects a growing trend among investors seeking geographical diversification amid a rally in U.S. tech stocks and enthusiasm surrounding artificial intelligence.
Market Dynamics
The shift comes as the Nifty 50 index has declined 4% over the past year, while the NASDAQ Composite has gained over 26%. Spot gold prices, which saw a 75% increase in 2025, have risen only 6% so far in 2026. In 2025, gold exchange-traded funds (ETFs) experienced a 282% increase in net inflows, totaling ₹42,961.46 crore. Nilesh Shah, managing director of Kotak Mahindra AMC, noted the behavioral patterns driving these investments, stating,
It is the same behavioural pattern wearing different clothes.
Risks and Opportunities
Experts caution that while the opportunity to diversify globally is significant, the associated risks are also substantial. Shankar Sharma, founder of GQuant Investech, highlighted the current enthusiasm for memory-chip companies, which he described as having been a struggling industry for decades. He emphasized that the current investor sentiment is driven by recent performance and fear of missing out (FOMO). The Indian mutual fund industry's average AUM increased by more than 15% from the previous quarter, according to data from the Association of Mutual Funds in India (Amfi).
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The shift toward global equities could lead to increased volatility in domestic markets as investors adjust their portfolios. The focus on U.S. tech stocks may affect Indian IT companies and related sectors, potentially impacting their stock performance. Investors will watch for upcoming earnings reports and economic indicators that may influence market sentiment and investment strategies.