20% Global Equity in Your Portfolio: Rebalance It Right?

If your portfolio has international equity, you need a clear rebalancing plan. Without one, your asset mix drifts and your actual risk quietly goes up — often without you noticing.

Here's what happened: Portfolios with international equity drift significantly when global and Indian markets move at different speeds, pushing actual allocation far from the original target.. After the 2024 Union Budget, long-term capital gains on international mutual funds are taxed at 12.5% after 24 months, removing the earlier indexation advantage investors relied on.. SEBI's 2022 overseas investment cap pause restricted many international funds from accepting fresh lump-sum investments, making SIP-based rebalancing the primary tool available to most investors..

What you should do: Calculate your current actual allocation today — log into your MF portal or app and divide each fund's current value by your total portfolio value to see real percentages.. Use the 5% drift rule: if international equity has moved more than 5 percentage points above or below your target, act now by redirecting upcoming SIP instalments to the underweight category.. Before selling any international fund units to rebalance, check the purchase date — units held under 24 months attract slab-rate tax, so prioritise selling older units first to minimise tax outgo..

Pro tip: Rebalance using new money first (SIP redirection), not by selling — this avoids triggering capital gains tax entirely and keeps your compounding clock running uninterrupted.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.