Access Innovative Global Themes via Gift City Route

PMS Bazaar recently organized a webinar titled “Access Innovative Global Themes via Gift City Route,” which featured Mr. Vaibhav Shah, Associate Director – Head- Business Strategy, Products & International Business, Mirae Asset Investment Managers and Mr. Scott Helfstein, Head of Investment Strategy, Global X ETFs.

The webinar blog covers insights from Mr. Shah and Mr. Helfstein, which included GIFT City’s role in simplifying global investments for Indians through tax-efficient structures and liberal regulations. It highlights the Mirae Asset Global Allocation Fund, and also shares expert insights on market trends and the US economy’s resilience.

Key aspects covered in this webinar blog are

What is GIFT City?
Distinct features of GIFT City
Mirae Asset’s presence and product offerings in GIFT City
The case for investing in global markets
Key themes driving future growth
Introducing the Mirae Asset Global Allocation Fund
Insights on the US and international markets

Summary: Mr. Shah introduced GIFT City as a unique financial hub offering global investment opportunities with tax benefits, streamlined compliance, and no investment caps. Through the Mirae Asset Global Allocation Fund, investors gain exposure to emerging global themes like AI, semiconductors, and defence tech. Structured as a Category III AIF, the fund ensures tax efficiency and flexible investment tranches. Mr. Helfstein added insights on the US economy’s resilience, highlighting innovation, strong consumer demand, and automation as key growth drivers despite global uncertainties.

Introduction to GIFT City and Its Unique Investment Opportunity

Mr. Vaibhav Shah started by sharing insights into GIFT City and its diverse investment options, emphasizing how it presents a win-win solution for both resident and non-resident Indians. He described GIFT City as “a gift for residents and non-residents,” intending to explain how this unique jurisdiction simplifies investing.

What is GIFT City?

Mr. Shah clarified that GIFT City, or Gujarat International Finance Tech City, is a special location situated between Ahmedabad and Gandhinagar. From a regulatory perspective under FEMA, GIFT City is not considered a part of India but a separate jurisdiction. This means investments made via GIFT City are treated as foreign investments into India.

One of the key points he highlighted was the presence of a single unified regulator, IFSCA, overseeing all financial activities in GIFT City — unlike India, which has multiple regulators for banking (RBI), insurance (IRDAI), capital markets (SEBI), and pensions (PFRDA). This single regulatory authority simplifies processes and aims to significantly grow the financial industry within GIFT City.

Distinct Features of GIFT City

Mr. Shah explained that GIFT City permits trading in 15 different currencies, notably excluding the Indian Rupee (INR) as a medium of exchange. He gave an example from their own experience of setting up a branch there, noting that sending laptops required import-export documentation, emphasizing the unique legal and tax status of GIFT City.

He further mentioned that GIFT City operates under a globally benchmarked tax regime, offering competitive or superior taxation terms compared to other financial jurisdictions. Essentially, it functions as India’s only central Special Economic Zone (SEZ), offering incentives to encourage the flow of capital and investments.

Mirae Asset’s Presence and Product Offerings in GIFT City

Mr. Shah shared that Mirae Asset had established a branch in GIFT City in 2023, staffed by a six-member team handling compliance, transactions, and deal management. They had launched two AIF products so far and planned to introduce retail mutual funds through GIFT City within the year. They manage a $250 Million India MidCap UCITS fund through this jurisdiction and intended to launch several new products providing access to both Indian and global markets.

The Case for Investing in Global Markets

Addressing the fundamental question of why investors should look at global markets, Mr. Shah shared data comparing the 10-year returns of various markets in local currency versus US dollars. He noted that India had only been the best-performing market once in that period, while Brazil had led multiple times in local terms but showed negative returns when adjusted for currency impact.

He emphasized the significant role currency fluctuations play in investment returns. For example, the Indian market’s annual returns were around 13-14% in INR terms but reduced to 7% when calculated in US dollars. Conversely, the US market generated a 14% return in dollar terms, almost double that of India.

Mr. Shah pointed out that while India constitutes only about 5% of the world’s GDP, many investors concentrate over 95% of their portfolios here, thereby missing out on 95% of global opportunities. This imbalance, he argued, makes global investing a crucial strategy for enhancing returns and diversifying risk.

Key Themes Driving Future Growth

Mr. Shah identified several global investment themes that are poised to define the future economy: semiconductors, artificial intelligence (AI), blockchain, disruptive materials, and defence technology.

He highlighted the semiconductor industry’s critical role in all technology and devices, mentioning that their Global X Semiconductor ETF delivered a 350% return over five years, underscoring the sector’s potential. AI, he said, will improve productivity by at least 20% in the next 5 to 10 years, making it a vital investment theme supported by products like the Global X AI & Robotics ETFs.

Blockchain, the backbone technology of cryptocurrencies, is also rapidly growing, with more than 15 crore investors involved in crypto, mutual funds, and stock markets combined in India. Disruptive materials like uranium for nuclear power and lithium for electric vehicles were also identified as key growth areas.

Additionally, geopolitical developments have elevated defense technology to a strategic investment theme, with countries investing heavily in this area.

Introducing the Mirae Asset Global Allocation Fund

To tap into these opportunities, Mr. Shah introduced the Mirae Asset Global Allocation Fund, a close-ended Category 3 Alternative Investment Fund (AIF). The fund offers diversified exposure across global markets and sectors, including emerging themes like AI, semiconductors, and defence tech.

He explained that this fund is accessible to resident Indians via the Liberalized Remittance Scheme (LRS) with an annual limit of $250,000 per person, family offices and corporates through the Overseas Portfolio Investment (OPI) route based on net worth, and NRIs and foreign nationals without investment limits.

A notable advantage is the fund’s taxation at the fund level rather than at the investor level, ensuring efficient tax handling for all categories of investors.

Insights on the US and International Markets

Mr. Scott Helfstein, has shared valuable perspectives on the US and international markets. Where he emphasized the importance of multi-asset portfolios, noting that despite challenges to the concept of US exceptionalism, the US economy has been the fastest-growing among the G7 nations since 2019, including through the COVID-19 pandemic.

He explained that the US’s economic strength stems from a robust consumer base and ongoing technological innovation. Mr.Scott drew parallels between the economic drivers of the US and India, highlighting similarities in growth themes.

He also provided an outlook on the US economy, noting it had avoided the expected deep recession in 2023, thanks in part to high corporate investment post-COVID. Mr.Scott described a shift from the information age starting in 1995 which got ended in 2020 to the automation age, where technology increasingly automates decision-making and business activities, improving efficiency and driving revenue growth through significant cost savings.

Mr. Scott explains how the US is currently looking better in 2025 when compared to 2024 based on comprehensive economic parameters based on his Economic Fundamentals model. He has also shown the various cases based on the changes to Tariff Policy, Taxes & Deregulation and how inturn it will affect the US Economy.

Mr. Scott shown how was the equity selloff in recent times, the corresponding market events and the resultant retreating of consumer and business sentiments. He stressed there is moderate reduction in estimates and revision for the GDP Growth and S&P500 Earnings Forecasts for the year.

He explained how to ride out the storm by taking exposure in themes such as Semiconductors, AI, Defense technology and materials for not just exposure in international markets and across the cap structure but also to reduce the overall portfolio volatility.

Mr. Scott also emphasized that themes such as Cloud Computing, AI, Big data, Vedio games, Automation has seen correction in recent times and they’re past their bubble scenario where they’re operating in real time and how investing today offers attractive entry points for long term secular growth in these themes like the beginning of information age.

Finally, he emphasized three key economic factors—labour, leverage, and liquidity—as essential indicators of US economic health. Despite slight challenges, the labour market remains strong, household debt is manageable due to fixed-rate mortgages, and liquidity remains loose, all of which contribute to a positive economic outlook.

Mr. Shah and Mr. Helfstein covered all the topics mentioned above in-depth and answered questions from the audience toward the end of the session. For more such insights on this webinar, watch the recording of this insightful session through the appended link below.