Indian Portfolios Should Allocate 10-30% to Global Assets in 2026, Says VT Markets Expert

Indian investors are increasingly recognizing the strategic importance of global diversification as domestic equity markets enter 2026 at record highs. Ross Maxwell, Global Strategy Operations Lead at VT Markets, advocates for allocating 10-30% of Indian portfolios to international assets, emphasizing that strong domestic performance alone cannot substitute for proper diversification.

Growing Interest in Global Diversification

The trend toward international investing among Indian investors has gained significant momentum, driven by increased awareness, easier access, and the pursuit of diversification beyond domestic markets. Assets under management in overseas-focused mutual funds and ETFs from India has grown substantially, reflecting participation from both retail and high-net-worth investors.

The number of Indian investors holding international equities and global ETFs has increased steadily, supported by digital investment platforms and simplified remittance routes under the Liberalised Remittance Scheme (LRS). Younger investors, particularly millennials, are leading this trend, motivated by exposure to global technology leaders, healthcare innovators, and diversified currency risk.

Rising Outbound Investment Queries

Despite domestic markets hitting record highs, Maxwell reports a noticeable rise in outbound investment queries, reflecting growing investor maturity. Many investors now view global allocation not as a tactical move driven by domestic weakness, but as a strategic necessity for long-term portfolio success.

Dominant Global Investment Themes

Indian investors are increasingly guided by global themes offering long-term structural growth and diversification opportunities. AI remains the most dominant theme, driven by its transformative impact across industries including software, semiconductors, automation, and data infrastructure.

The major themes attracting Indian capital include:

• Artificial Intelligence: Global leaders in AI platforms, cloud computing, and chip manufacturing
• Technology: Cybersecurity and digital payments supporting global digitization
• Clean Energy: Renewable power, electric vehicles, battery storage, and hydrogen technologies
• Healthcare: Biotechnology, medical devices, and innovation-driven pharmaceuticals
• Commodities: Cyclical investments viewed as inflation hedges and supply-chain realignment beneficiaries

Regulatory Framework and Compliance

The Liberalised Remittance Scheme continues to provide the primary framework for outbound investments, with the overall LRS limit of USD 250,000 per individual per financial year remaining unchanged. Investors should be aware of tax collection at source on foreign remittances, which affects liquidity and cash flow despite being creditable against final tax liability.

Compliance requirements include proper documentation of transactions, understanding overseas income taxation in India, and mandatory disclosure of foreign assets and income in tax returns. Exchange-rate movements must be tracked as they impact taxable gains, and many investors benefit from professional advice or technology-enabled platforms for compliance management.

Recommended Portfolio Allocation

Maxwell suggests that allocation to global assets should range from 10% to 30% of the overall portfolio, depending on investor goals, time horizons, and risk appetite. For investors with long-term horizons, higher allocation toward the upper end can help capture global growth themes and reduce dependence on domestic cycles.

Investment Vehicle Options

Global ETFs offer cost-efficient and transparent exposure with low expense ratios and high liquidity. International mutual funds suit investors preferring professional management and simpler tax handling, while direct stock investing provides maximum control but requires deeper research and careful compliance management.

For most Indian investors, Maxwell recommends using diversified ETFs or mutual funds as the core global allocation while selectively adding direct stocks for targeted exposure.

Regional Market Opportunities

Rather than focusing on single markets, Maxwell advocates selective opportunities across regions for enhanced geographic diversification. The US remains a core allocation due to leadership in technology, AI, and healthcare innovation, while Japan gains renewed interest from corporate governance reforms and improving return ratios.

Europe requires selective approach focusing on industrials, clean energy, luxury goods, and global exporters. China offers long-term potential but requires cautious approach due to regulatory uncertainty, while emerging markets in Southeast Asia and Latin America attract interest for favorable demographics and supply-chain diversification.