Mirae Asset Global Allocation Fund - Invest in Global Markets via GIFT City | Tax Benefits for NRIs & HNIs

For High-Net-Worth Individuals (HNIs) and Non-Resident Indians (NRIs), diversifying investments across global markets is no longer a luxury—it’s a necessity. The Mirae Asset Global Allocation Fund, a Category III Alternative Investment Fund (AIF) launched under the GIFT City (Gujarat International Finance Tec-City) IFSC framework, offers a compelling opportunity to invest in global equities while benefiting from India’s only International Financial Services Centre (IFSC).

This article explores:

• Why invest in global markets?
• Key advantages of GIFT City for NRIs and global investors
• Understanding Category III AIF and its benefits
• Fund structure, portfolio, and tax benefits
• How the Liberalized Remittance Scheme (LRS) facilitates seamless investments

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Why Invest in Global Markets?

1. Diversification to Mitigate Country Risk

Investing solely in domestic markets exposes portfolios to risks like:

• Political instability
• Economic downturns
• Currency depreciation

By allocating funds globally, investors can:
✔ Access top-performing markets (US, Europe, Emerging Markets)
✔ Reduce dependency on a single economy
✔ Benefit from currency appreciation (e.g., USD strength against INR)

2. Exposure to High-Growth Themes

The fund targets cutting-edge sectors such as:

• Artificial Intelligence (AI) – Expected to grow to $826B by 2030
• Semiconductors – Projected 8.6% CAGR (2021-2028)
• Blockchain & Disruptive Tech – Emerging innovations

3. Superior Risk-Adjusted Returns

Historical data shows that global markets often outperform domestic ones:

Market	2024 Returns (USD)	15-Year Annualized Returns
S&P 500 (US)	26.3%	14%
Japan	13.2%	6.3%
India	12.4%	6.9%

(Source: Bloomberg, Mirae Asset Data)

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Why GIFT City? Tax & Regulatory Advantages for NRIs & Global Investors

GIFT City is India’s only IFSC, designed to rival global hubs like Singapore and Dubai. Key benefits:

1. Globally Competitive Tax Regime

✅ Zero Capital Gains Tax for non-residents (vs. 10-30% in domestic India)
✅ No Dividend Distribution Tax (DDT) for foreign investors
✅ Full capital convertibility (15+ currencies allowed)

2. Regulatory Ease

• Single unified regulator (IFSCA) with powers akin to SEBI, RBI, IRDA, and PFRDA
• No FEMA restrictions (unlike domestic Indian investments)
• Easier repatriation of funds for NRIs

3. Ideal for NRIs & Foreign Nationals

• No TDS on redemptions for non-residents
• Structured as an “Outbound Fund”, allowing seamless global investments

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Understanding Category III AIF: Why It Matters

The Mirae Asset Global Allocation Fund is structured as a Category III Alternative Investment Fund (AIF), which offers unique advantages for sophisticated investors:

Key Features of Category III AIF

🔹 Sophisticated Investment Strategies: Can employ leverage, derivatives, and complex hedging techniques for enhanced returns.
🔹 Flexible Asset Allocation: Unlike traditional mutual funds, AIFs can dynamically shift allocations between equities, ETFs, and other instruments.
🔹 Close-Ended Structure: Typically has a fixed tenure (3-5 years), aligning with long-term investment horizons.
🔹 Minimum Investment and Target Investors: The minimum investment amount for AIFs in India, including Category III, is generally ₹1 crore. These funds are typically targeted towards High Net Worth Individuals (HNIs), institutional investors, and sophisticated investors who understand the risks associated with complex investment strategies.
🔹 Taxation: Unlike Category I and certain Category II AIFs, Category III AIFs do not have a statutory pass-through status for tax purposes. The income earned by the fund is typically taxed at the fund level, based on its legal structure (trust, LLP, or company). Distributions to investors are then taxed according to the applicable income tax laws.

Why Category III AIF is Ideal for Global Investing

✔ Access to Offshore Markets: Can invest in global ETFs and themes not easily available in domestic mutual funds.
✔ Tax Efficiency in GIFT City: Combines the flexibility of AIFs with GIFT City’s tax-neutral status.
✔ Professional Management: Managed by Mirae Asset’s global investment team with expertise in cross-border portfolios.

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Mirae Asset Global Allocation Fund: Key Features

1. Fund Structure

• Category III AIF (Close-ended, 3+2 years)
• Base Currency: USD
• Minimum Investment: $151,000 (Accredited Investors: $10,000)

What is an Accredited Investor? An Accredited Investor is an individual or entity that meets specific financial and regulatory criteria set by SEBI.

Learn how to become Accredited Investor

2. Portfolio Allocation

Segment	Allocation	Key ETFs
Core (Developed Markets)	50-70%	Global X S&P 500 ETF
Tactical (Emerging Markets)	20-30%	Global X MSCI China ETF
Thematic (AI, Semiconductors)	10-15%	Global X AI & Tech ETF

3. Backtested Performance (2018-2025)

• 5-Year CAGR: 17.5% (USD terms)
• S&P 500 ETF delivered 162.8% absolute returns since 2018

(Past performance is not indicative of future results.)

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How NRIs Can Invest via LRS

The Liberalized Remittance Scheme (LRS) allows:
✔ Up to $250,000/year per individual (families can pool funds)
✔ No restrictions on frequency of transfers
✔ Easy digital onboarding (KYC via PAN/Aadhaar)

Tax Collected at Source (TCS) Rules

• 20% TCS applies on LRS remittances above ₹7 lakh (refundable via ITR)
• No TCS for education/medical expenses (up to ₹10 lakh)

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Conclusion: Why This Fund Stands Out

The Mirae Asset Global Allocation Fund is a strategic gateway for HNIs and NRIs to:
🌍 Diversify globally with a professionally managed portfolio
🏦 Leverage GIFT City’s tax-efficient structure
📈 Capture growth in AI, Semiconductors, and US equities

For investors seeking global exposure with Indian regulatory comfort, this fund presents a compelling opportunity.

Interested? Consult with Meta Investment today for details.