Rupee under pressure? Baroda BNP Paribas Aqua FoF offers a global growth hedge

Synopsis

Investors are exploring global equity markets for diversification and growth, especially with the Indian rupee facing pressure. The Baroda BNP Paribas Aqua Fund of Fund offers dual benefits: exposure to international equities and potential gains from currency depreciation. This thematic fund focuses on the water value chain, providing geographical diversification and reducing reliance on domestic market cycles.

With the Indian rupee facing persistent pressure and global markets offering diverse growth opportunities, investors are increasingly looking beyond domestic assets to build resilient portfolios. In such a scenario, funds that combine the benefit of rupee depreciation with exposure to global equity markets are gaining traction among investors seeking diversification and long-term growth.

One such offering is the Baroda BNP Paribas Aqua Fund of Fund, which aims to provide a dual advantage—participation in international equities and potential gains from currency movement. As the rupee weakens against stronger global currencies, overseas investments can enhance returns for Indian investors, making global allocation an important portfolio strategy.

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The fund primarily invests in units of BNP Paribas Funds Aqua (Lux), a global thematic strategy focused on the water value chain. This includes companies involved in water treatment, distribution, infrastructure, and efficient usage

This global exposure not only helps investors diversify geographically but also reduces reliance on domestic market cycles. The portfolio spans developed markets such as the United States, the United Kingdom, France, Switzerland, Japan, and others, with sectoral exposure across industries, utilities, and healthcare.

Another key appeal of the fund lies in its accessibility. Investors can start with a minimum lump sum of Rs 5,000, while systematic investment plans (SIPs) are available from Rs 500 per month, allowing for disciplined investing over time.

In terms of performance, the fund has delivered 26.84% returns over the past year and a 14.52% CAGR over three years. A lump sum investment of Rs 1 lakh would have grown to approximately Rs 1.5 lakh over this period. A monthly SIP of Rs 10,000 over three years in the scheme would have accumulated to over Rs 6.86 lakh, reflecting an XIRR of 16.67% as of February 2026.

The scheme is open-ended, offering liquidity to investors, with an exit load applicable only if redeemed within 12 months. This makes it suitable for those with a medium- to long-term investment horizon.

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By combining global thematic exposure with the potential benefit of currency depreciation, the Baroda BNP Paribas Aqua Fund of Funds positions itself as a differentiated option for investors looking to diversify beyond Indian equities. As global trends such as sustainability and resource management gain prominence, such thematic international funds could play a meaningful role in portfolio construction.

The fund had an AUM of Rs 35.68 crore as of February 28, 2026. The fund is benchmarked against MSCI World. The fund had 95.22% in other assets, 4.75% in clearing corporation of India, and 0.02% in net current assets.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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