A recent Goldman Sachs report outlining the 2026 market outlook projects a broadening of the current bull market. In 2025, the rally was heavily concentrated in US-based mega-cap technology and AI growth stocks. For 2026, the primary strategic shift is disciplined diversification: expanding across geographies beyond the US, balancing growth factors with value, and broadening sector exposures outside of AI.
Investing globally can be approached through several avenues: directly holding equities listed on foreign exchanges, domestic mutual funds, GIFT City-domiciled funds, or offshore mutual funds and ETFs. However, because regulatory caps set by the Reserve Bank of India have restricted fresh inflows into many domestic global funds, alternate vehicles like GIFT City and offshore structures are becoming essential.
Option 1: GIFT City-Based Mutual Funds (DSP Global Equity Fund)
The DSP Global Equity Fund, accessible through platforms like Vested, represents a growing category of funds operating out of Gujarat’s GIFT City. Its geographic mandate requires at least 65% in global equities, currently broken down into approximately 30% in the United States, 25% in the European Union, 20% in China, 6% in South Korea, and 14% across other international markets.
Rather than chasing AI momentum, the fund targets large-cap companies with market capitalizations exceeding $30 billion that are insulated from rapid technological disruption. Core holdings include Nintendo, Puma, Universal Music Group, Airbnb, and BMW. Benchmarked against the MSCI All Country World Index (ACWI), the strategy seeks businesses generating 10% to 12% in owner’s earnings (from operational earnings growth, dividends, and share repurchases) and purchases them at an estimated 30% to 40% margin of safety.
Taxation for GIFT City funds is handled at the fund level rather than through direct capital gains tax on the individual investor. The fund pays approximately 42% on short-term gains (under 24 months) and 14.95% on long-term capital gains (over two years). While this structure simplifies personal tax filings, retail entry is limited by a high minimum ticket size of $5,000 (roughly ₹4,50,000) alongside an expense ratio of 1.75%.
Option 2: Truly Global Mutual Funds (Fidelity Global Technology Fund)
For sustained technology exposure, Luxembourg-domiciled offshore funds like the Fidelity Global Technology Fund offer broad industry scale. The fund manages around $28 billion in assets and carries an expense ratio of 1.89%. Geographically, it is weighted 59% toward the US, with secondary exposure to Taiwan (9.82%), the Netherlands, China, South Korea, Sweden, France, and Japan.
Its portfolio is anchored by major technology leaders, with Taiwan Semiconductor Manufacturing Company (TSMC) as its largest single allocation (9.26%), followed by Apple, Microsoft, Amazon, Alphabet, Salesforce, and Marvell Technology. Tracking the MSCI ACWI Information Technology Index, the fund displays a lower volatility profile during broad tech corrections—it held up better than its benchmark in major downturns like 2018 and 2022, while slightly trailing the index during aggressive bull years.
Option 3: China-Focused Global Funds
Investors seeking direct exposure to an emerging market turnaround can evaluate vehicles such as the Fidelity International China Focus Fund. Following a rebound in Chinese equities, the fund allocates 82% of its portfolio directly to mainland China, alongside 7.99% in Hong Kong, 5.72% in the Netherlands, and an incidental 1.06% in the US.
The portfolio is primarily composed of large-cap Chinese consumer and technology firms such as Tencent and Alibaba. Launched in 2015, the fund oversees approximately $2.5 billion in assets with an expense ratio of 1.91%. It has historically outperformed its local benchmark index over a 5-year timeframe and serves as a regional satellite allocation for systematic, multi-year investment plans.
Option 4: European Market Funds
Investors looking to diversify away from tech-heavy markets can access European enterprise value through offerings like the BlackRock European Equity Fund. Managing $1.3 billion with an expense ratio of 1.82%, the fund allocates capital across the United Kingdom, Switzerland, Germany, France, the Netherlands, Ireland, Italy, Spain, Sweden, and Belgium.
Because broad European indices have posted more conservative historical growth compared to the US, the fund has delivered moderate returns. However, it demonstrates cyclical operating leverage—tending to outpace its benchmark during economic expansions (such as 2019, 2020, 2023, and 2024), while experiencing sharper drawdowns during contraction years like 2022
Strategic Takeaway
The central thesis heading into 2026 is avoiding over-concentration in a single geography or sector. Whether using GIFT City funds for tax-managed global value, offshore tech funds for institutional scale, or targeted single-region funds covering China and Europe, the primary objective is constructing a balanced portfolio capable of navigating shifting market cycles.
