Saurabh Mukherjea calls out the silent trap in India-only portfolios most investors ignore

On most days, Dalal Street and Wall Street don’t walk the same line. While both deliver comparable long-term returns, the journey is often starkly different. That divergence, says Saurabh Mukherjea, founder of Marcellus Investment Managers, is exactly why Indian investors should look beyond borders.

“Investing only in India? You might be missing out,” Mukherjea wrote recently on LinkedIn. His post makes a case for rethinking the India-only portfolio mindset—especially in a world where global crises hit markets differently, and local triggers don’t always travel far.

In its latest investor note, Marcellus highlights that while the US market has delivered consistently strong, earnings-led returns, these gains have little to do with GDP growth. 

“The US market has a track record of strong, earnings led returns despite modest GDP growth,” the note states. This disconnect is what sets America apart from other developed economies, where mature GDP often correlates with weaker equity returns.

What makes the US particularly compelling for Indian investors is the low correlation with Indian markets. Five-year rolling correlations between the S&P 500 and Nifty 50 typically range between 40–70%. “Global crises shake both markets, but India tends to fall harder,” writes Mukherjea. “Local events hit one market more than the other.”

Despite delivering similar long-term returns, the Indian and US markets behave differently in times of stress. For instance, during Covid or the US rate hike cycle, the disparity in performance was stark. Diversification, therefore, isn’t just academic—it shows up in real-world portfolios. A portfolio split between India and the US, rebalanced annually, offers higher returns and lower volatility than a single-market approach. “Smart investing isn’t about choosing one market over the other—it’s about striking the right balance,” says Mukherjea.

Marcellus’ Global Compounders Portfolio (GCP) embodies this balance. With 80% allocation to US equities and the rest to quality stocks from Europe and Canada, GCP has outperformed the S&P 500 since inception (October 2022) and shows only 40% correlation with Nifty weekly returns. Indian investors can access this via GIFT City-based SMAs or as accredited investors, starting at USD 25,000.

In essence, global diversification isn’t just prudent—it’s productive. As Marcellus puts it, “Diversification would provide a free lunch for such investors.”