11 GIFT City Outbound Funds for Resident Indians and How to Choose One

GIFT City outbound funds allow resident Indians to invest in overseas markets through dollar-denominated funds based in GIFT City. 

The current options include eight retail funds with minimum investments starting at $500 or $5,000, global portfolio management services (PMS) from $75,000 and alternative investment funds (AIFs) from around $150,000.

You may have tried to invest in an international mutual fund recently, only to find that it has stopped accepting fresh investments. This is because several Indian mutual funds have reached the regulatory limit for overseas investments. 

GIFT City outbound funds offer another route to access global markets. But choosing one involves more than looking at the fund’s name or past returns. Minimum investment, costs, taxation, liquidity and your existing portfolio all matter. 

This guide covers the available options and explains what to consider before investing.

What are GIFT City outbound funds?

An outbound fund is established in GIFT City’s International Financial Services Centre (IFSC) and invests money outside India. These funds are regulated by the International Financial Services Centres Authority (IFSCA).

You invest in US dollars, and the fund’s net asset value (NAV), or the price of each unit, is also declared in dollars. When you redeem your investment, the money is paid in dollars and your bank converts it into rupees.

You can think of GIFT City as a route through which money leaves India under the applicable rules and gets invested in overseas markets such as the US, Europe, Japan and China.

If you are new to this, read our explainer on what a GIFT City mutual fund is.

GIFT City Outbound funds list: Options available to resident Indians

The following list covers the outbound options we could verify from fund house documents and reliable reports as of 27 October 2026.

Minimums are in US dollars and change often. Edelweiss, for example, raised its minimum to $10,000 in July 2026 and cut it back to $5,000 from 6 October 2026, as we reported in our Edelweiss news update. Check the latest scheme document before you invest.

Retail outbound funds: Minimum investment of $500 or $5,000

Retail outbound funds work much like regular mutual funds. Your money is pooled with that of other investors, and you receive units in return.

You can generally redeem on any business day, subject to the scheme’s exit-load conditions.

Here is what each fund offers.

Passive US index funds

The Parag Parikh IFSC S&P 500 Fund of Fund and Parag Parikh IFSC Nasdaq 100 Fund of Fund offer exposure to two major US market indices.

Both invest almost all their money in an Ireland-based exchange-traded fund (ETF) that tracks the respective index. An ETF is an investment fund traded on an exchange, much like a stock.

PPFAS GIFT reduced the minimum investment from $5,000 to $500 in August 2026. You can read more in our news update on the lower entry amount.

According to the September 2026 factsheets, the direct plan’s total annual cost, including the underlying ETF, is 0.35% for the S&P 500 fund and 0.50% for the Nasdaq 100 fund. Neither fund has an exit load or lock-in period.

Passive global and emerging market index funds

HDFC launched two passive funds of funds in 2026.

The HDFC International Developed Markets Equity Fund invests in a UBS ETF tracking the MSCI World index. This provides exposure to developed markets, including the US, Europe and Japan.

The HDFC International Emerging Markets Equity Fund invests through another UBS ETF tracking the MSCI Emerging Markets index.

Both funds have a minimum investment of $5,000. The fund-level fee is capped at 0.50% for the direct plan and 1.00% for the regular plan, in addition to the underlying ETF’s cost.

The exit load is 2% during the first year and 1% during the second year.

You can read our reviews of the Developed Markets fund and the Emerging Markets fund for more details.

Active global equity funds

Unlike passive funds, which track an index, active funds have a manager selecting investments. 

• DSP Global Equity Fund: The fund holds 30 to 50 large global companies. It follows a valuation-focused approach and avoids banks and tobacco companies.

Its GIFT City page lists a total expense ratio (TER) of up to 1% for the direct plan and 1.75% for the regular plan. An exit load of 1% applies to redemptions within 24 months.

• Marcellus Global Equities Fund: Launched in June 2026, this fund invests in global companies linked to four themes: defence and aerospace, power, AI-related spending and luxury.

It charges 2% annually, with a 2% exit load for redemptions within 24 months. As reported by Business Today, additional investments start at $2,000.

• JioBlackRock Advantage World Equity Fund (IFSC): Launched on 26 October 2026, the fund invests 90% to 100% of its money in BlackRock’s Advantage World Equity Fund. The underlying fund uses data models to select stocks across the US, Europe and Japan.

Its indicative TER is 0.90% for the direct plan and 1.40% for the regular plan. There is no exit load, according to Business Today.

Active regional fund

The Edelweiss Greater China Equity Fund is a feeder fund. It invests your money in the JPMorgan Funds Greater China Fund, which is actively managed and focuses on China, Hong Kong and Taiwan.

Its August 2026 factsheet shows total annual costs of up to approximately 1.42% for the direct plan and 2.42% for the regular plan, including the underlying fund’s expenses.

For investments made from 1 May 2026, the exit load is 2% if you redeem within 395 days and 1% up to 760 days.

Most Indian portfolios have limited exposure to this region. That may make the fund useful for diversification, but investing in a specific region also brings concentration risk.

What’s coming next?

PPFAS GIFT’s website lists another active outbound fund as “Coming Soon”, but details have not yet been announced. More fund houses have also filed schemes with IFSCA, so the available options may increase.

Outbound PMS: Minimum investment of $75,000

A portfolio management service (PMS) is different from a mutual fund. Instead of owning units in a pooled fund, you own individual shares in your GIFT City demat account. The portfolio manager makes investment decisions on your behalf.

This gives you a more concentrated, actively managed portfolio. However, because you own the shares directly, you also have to account for the tax implications of individual sales.

• Marcellus Global Compounders Portfolio: Operating since October 2022, this portfolio holds 35 to 40 stocks across North America and Europe.

It offers three fee structures, ranging from a flat annual fee of 2% to a performance-based fee above a specified hurdle. Resident Indians also pay 18% GST on the fees, according to its listing on Tequity.

• Parag Parikh Global Investing Strategy: This is PPFAS GIFT’s global PMS. The minimum investment for the discretionary option is $75,000.

Outbound AIFs: Minimum investment of around $150,000

A Category III alternative investment fund (AIF) pools money from larger investors. Some schemes are closed-ended, meaning you cannot freely withdraw your money before the fund’s term ends.

The Mirae Asset Global Allocation Fund is one such option. Its August 2026 presentation describes it as a closed-ended scheme with a three-year term, extendable by another two years.

The minimum commitment is $151,000. The fund invests 90% to 100% of its money in global ETFs and offshore funds.

There are outbound AIFs from Baroda BNP Paribas and Aditya Birla Sun Life.

Our GIFT City regulations guide explains how IFSCA classifies these schemes.

Retail fund vs PMS vs AIF: Which type fits you?

The product structure affects your minimum investment, costs, liquidity and taxation. These differences can be more important than the fund’s name.

Your available LRS limit is another factor. The annual limit of $250,000 per person covers all eligible remittances abroad, not just investments.

It also includes expenses such as your child’s overseas education fees and foreign travel payments made through your bank.

For example, if your family has already remitted ₹40 lakh towards overseas education fees during the year, you will have less LRS room available for an AIF requiring a $150,000 commitment.

Not sure which type suits your amount and the LRS room you have left this year? Our GIFT City investment team can map it out with you.

How are GIFT City outbound funds taxed?

Taxation is one of the most important differences between retail funds, PMS and AIFs. The rules are not the same for all three structures.

For more details on TCS and ITR reporting, read our guide on whether Indian residents can invest in GIFT City.

Retail funds and AIFs: Tax paid inside the fund

In retail outbound funds and AIFs, the fund pays tax on its gains. The NAV you see is therefore after tax. When you redeem your units, you do not pay capital gains tax again on the same gains. You report the redemption as exempt income in your income tax return.

The applicable tax rates within the fund structure are:

PPFAS GIFT publishes two NAVs daily for its funds: one reflecting long-term tax and another reflecting short-term tax. You buy units at the long-term NAV. If you redeem within two years, the short-term post-tax NAV applies.

Other fund houses may handle the calculation differently, so read the tax note for the scheme you are considering.

There are three important limitations to understand:

• You cannot use your lower income tax slab: The fund pays tax at the applicable top rate, irrespective of your personal income. This includes surcharge, even if you would not have paid it on your own investments. You can read more about income tax surcharges.
• The ₹1.25 lakh exemption does not apply: This exemption is available for specified listed Indian equity gains on which you pay tax directly. It does not reduce the tax paid by a GIFT City fund.
• You cannot set off losses: Any loss incurred within the fund remains within the fund. You cannot use it to offset gains from your other investments.

PMS: Tax paid by you

In a PMS, you own the shares directly. This means every sale creates a capital gain or loss that you need to account for in your tax return.

Shares held for more than 24 months are taxed at 12.5%, plus applicable surcharge and cess. Shares held for a shorter period are taxed at your income tax slab rate.

Dividends are also taxed at your slab rate. You may be able to claim credit for US tax withheld by filing Form 67.

You also have to report the holdings and individual transactions yourself. This involves more paperwork, but it can be beneficial if your tax slab is lower than 30% or if you want to set off eligible losses.

Why does the 24-month mark matter?

Selling before 24 months can affect your returns in two ways. You may face a higher short-term tax rate, and many active funds also charge an exit load during this period.

Consider an investment of $5,000 in a fund with a 1% exit load within 24 months. Assume it grows by 30% to $6,500.

These are illustrative figures and assume the same 30% gain at both points. The exact amount will depend on how the fund calculates its post-tax NAV and exit load.

In this example, waiting until month 30 leaves you with around $482 more. This is why the investment horizon matters when choosing an outbound fund.

TCS and reporting

Banks collect tax collected at source (TCS) at 20% on the portion of investment remittances exceeding ₹10 lakh in a financial year.

This rule remained unchanged in Budget 2026, as explained in this Budget 2026 TCS update.

TCS is not an additional tax. The amount appears in your Form 26AS and can be adjusted against your tax liability when you file your return.

There is some difference in guidance on whether retail outbound fund units need to be disclosed in Schedule FA, the foreign assets section of your ITR. The FAQs below explain the issue. You should check with your tax professional before filing.

Anuj says, “There are two common misconceptions about GIFT City funds. Some investors assume they are tax-free, while others dismiss them because they hear about the 43% short-term tax rate. Neither view tells the full story. The tax is paid within the fund, and after a holding period of more than two years, the effective rate can be around 15%. What matters most is whether you can stay invested beyond that 24-month period. Your holding period can have a bigger impact on the outcome than the fund you select.”

GIFT City Outbound funds vs Indian international funds vs Vested or INDmoney

If you want to invest in overseas markets from India, you generally have three routes:

1. GIFT City outbound funds,
2. Indian international mutual funds or
3. Direct investments in foreign stocks and ETFs through platforms such as Vested and INDmoney.

Here is how they compare.

One additional point to consider is US estate tax. If you directly own US-listed shares or ETFs, your heirs may face US estate tax on large holdings. 

With a GIFT City outbound fund, you hold units of an Indian IFSC fund rather than owning the US shares directly. PPFAS lists “no inheritance tax implications” as one of the features of its funds.

However, estate tax treatment depends on your circumstances. Confirm the implications with a tax adviser before making a decision.

Anuj says, “Investing directly in US ETFs through an app may seem simpler, but the right route depends on the amount you plan to invest, your holding period and how comfortable you are with foreign tax reporting. An outbound fund can be convenient if you want long-term global exposure without handling individual overseas transactions. Direct investing may be more cost-effective for larger investments, provided you have the right investment guidance, are comfortable with Schedule FA and foreign tax credits. The important thing is to choose a route you can manage over the long term.”

How to choose the right outbound fund in 5 steps?

Before selecting a scheme, look at your overall portfolio and investment goals. These five steps can help you narrow down the options.

• Decide how much of your portfolio should be global. Start by deciding what proportion of your total investments you want outside India. Your reasons could include funding a child’s overseas education, retirement expenses in dollars or reducing dependence on a single economy.

A percentage-based allocation is generally more useful than choosing a fixed rupee amount.

• Check what you already own. If you already have an international fund, Nasdaq ETF or direct US stocks, you may have substantial exposure to large US companies. Adding another S&P 500 fund may simply increase the same exposure.

A developed markets, emerging markets or China-focused fund could add something different. Our glossary entry on diversification explains why this matters.

• Choose between passive and active funds. Passive funds generally cost 0.35% to around 0.50% a year, in addition to the underlying ETF expenses.

Active funds may cost 1% to 2% or more. An active fund needs to deliver enough additional return to justify the higher cost, after accounting for fund-level tax.

• Match the product to your investment amount, LRS limit and tax slab. If you have less than $75,000 to invest, retail funds are the available route among these options.

Above that amount, you can compare a PMS, where tax is paid by you, with a retail fund, where tax is paid inside the fund.

• Calculate the total cost. Look beyond the TER. Include the underlying ETF’s expenses, exit load, bank forex margin and transfer charges. For smaller investments, bank charges can make a significant difference to your overall cost.

For a more detailed explanation of factsheets and fund costs, read our guide on how to choose a GIFT City mutual fund.

Who should and shouldn’t consider outbound funds?

Outbound funds may suit you if:

• You can remain invested for at least five years, and certainly beyond the 24-month mark.
• Your salary, home and most investments are in India, and you want some exposure to other economies and currencies.
• You prefer having the fund handle capital gains tax rather than tracking overseas transactions yourself.
• You have sufficient LRS room after accounting for your family’s other remittances.

They may not suit you if:

• You may need the money within the next two years.
• You want to invest through a monthly SIP directly from your salary account.
• You expect global funds to outperform Indian equity markets every year. That will not happen consistently.
• You are investing only because global markets have performed well recently.

Anuj says, “Investors often ask whether they have missed the opportunity because global markets are already at record highs. Instead of trying to predict the right entry point, first decide how much of your portfolio should be invested outside India to meet your goals. Global equity exposure should be viewed as a long-term allocation, not a short-term market call. If you are uncomfortable investing the entire amount at once, you can spread the investment over a few months.”

Want to work out how much of your portfolio should go overseas? A goal-based planning review can help you set a number that fits your goals.

Example: Building a global allocation from Pune

Consider Meera, an illustrative 44-year-old IT manager living in Pune. She has ₹60 lakh invested in Indian mutual funds, owns a home in India and earns her salary in rupees.

Her existing US fund of funds stopped accepting SIPs in 2026. She now wants to invest 10% of her portfolio overseas. That works out to around ₹6 lakh, or approximately $6,300 at an exchange rate of ₹95 to the dollar.

For this example, assume her bank charges a 1% forex margin and ₹750 per transfer. Actual charges will vary between banks.

There are a few things Meera should consider:

• Both plans keep her total remittance below ₹10 lakh, so no TCS is collected.
• Plan A spreads her investment over the year but involves higher bank charges because she makes four transfers.
• Plan B has a lower transfer cost and provides exposure to Europe and Japan as well as the US. However, it has an exit load during the first two years.
• Under either plan, selling before 24 months could mean a higher short-term tax rate and an exit load, where applicable.

Meera chooses Plan B because she wants broader geographical exposure. She plans to remain invested for at least seven years and make additional investments when she receives her annual bonus.

7 Common mistakes to avoid

1. Assuming outbound means tax-free: The fund pays tax at the applicable top rate before the post-tax NAV is declared.
2. Selling within 24 months: You may face the higher short-term tax rate as well as an exit load.
3. Buying the same exposure twice: Adding another US large-cap fund may increase concentration rather than diversify your portfolio.
4. Ignoring exit loads: Five of the eight retail funds have an exit load during the first one to two years.
5. Forgetting other remittances: Overseas education fees, foreign travel and investments all count towards your $250,000 annual LRS limit.
6. Sending exactly the minimum amount: Bank charges and forex conversion can affect the amount received by the fund. Consider this before transferring money.
7. Relying on an outdated fund list: Minimum investments and available schemes changed several times in 2026. Always check the latest details.

For more examples, read our guide to GIFT City investment mistakes.

How can Zenith Finserve help you?

At Zenith Finserve, we help resident Indians and NRIs understand their GIFT City investment options before they move their money.

We can help you:

• Decide how much of your portfolio should be invested outside India, based on your financial goals.
• Compare retail funds, PMS and AIFs based on your investment amount, tax slab and available LRS limit.
• Plan your remittances and understand how TCS may affect your cash flow.
• Understand the reporting requirements for your income tax return.

Our approach is to explain the available options and help you make an informed decision, without pressure to invest.

Explore our GIFT City investment services to learn more.

Conclusion

GIFT City outbound funds give resident Indians another way to invest in global markets, particularly when several Indian international mutual funds are not accepting fresh investments.

Before choosing a fund, keep three things in mind. First, resident Indians can invest in outbound funds through their LRS limit.

Second, the structure you choose – retail fund, PMS or AIF – affects the minimum investment, tax treatment and paperwork. Finally, the 24-month holding period can make a significant difference to the amount you receive.

Start by deciding how much of your portfolio should be invested globally. Then choose a fund that adds useful exposure rather than repeating what you already own. Most importantly, invest with a suitable time horizon.

If you need help evaluating the options, our team can help you understand the choices before you invest.

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