Parag Parikh Financial Advisory Services (PPFAS) is gearing up to launch three new international equity Fund of Funds (FoFs) as part of its strategy to help investors diversify their portfolios into global markets. This announcement follows the introduction of two key equity offerings: the Parag Parikh Flexi Cap Fund and the Parag Parikh ELSS Tax Saver Fund. Neil Parikh, speaking at the Moneycontrol Mutual Fund Summit on October 27 in Bangalore, highlighted the need for improved tax efficiency in GIFT City structures, which currently impose taxes on every sell transaction, making active portfolio management less effective.

To counter these challenges, PPFAS intends to concentrate on feeder fund structures, where capital gains tax does not apply to churn transactions, and dividends face a reduced withholding tax of 15 percent compared to the higher rates in direct overseas investments. Parikh emphasized that merely launching retail funds in GIFT City may not yield optimal results without fully exploiting tax advantages. Instead, he advocates for routing investments through established global structures, which can enhance performance while ensuring compliance with regulatory standards.

PPFAS plans to introduce two passive funds that will track major global indices, including the S&P 500 and NASDAQ, alongside one actively managed fund that will adopt a flexi-cap, "go-anywhere" investment strategy. This active fund will focus on developed markets, steering clear of countries with lower policy confidence, such as Thailand or China, to safeguard investor interests. The emphasis will be on regions with robust governance, ensuring that the funds are positioned for both growth and stability in the ever-evolving global market landscape.