Global markets in meltdown mode. Should you pull out of Hang Seng, Wall Street funds?

With global equity markets witnessing volatility and major indices like Hang Seng and the U.S. benchmarks facing sharp corrections post Trump imposed sweeping tariffs on several countries, an expert recommends that in this environment, it makes sense to avoid countries heavily dependent on U.S. exports, particularly those directly targeted by tariffs and investors may consider increasing allocation to emerging economies which stand to benefit from supply chain diversification and rising domestic consumption.

“In this environment, it makes sense to avoid countries heavily dependent on U.S. exports, particularly those directly targeted by tariffs (like China, Taiwan, and some East Asian economies). On the flip side, investors may consider increasing allocation to emerging economies like India and Vietnam, which stand to benefit from supply chain diversification and rising domestic consumption,” Sagar Shinde, VP of Research at Fisdom recommended.

“Europe could be a mixed bag — while some countries may be indirectly affected by the slowdown in global trade, others with strong internal demand could remain resilient. Thematic international funds focused on domestic consumption or digital innovation, and not overly reliant on exports, may also offer pockets of opportunity,” he added.


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India now faces a 26% tariff, higher than expected but still significantly lower than the 54% levied on China. Despite the hit, India appears to be in a relatively stronger position compared to countries like Vietnam, Bangladesh, and Thailand. Additionally, key sectors such as pharmaceuticals, semiconductors, copper, gold, energy, and minerals have been spared from the tariffs, at least for now.

According to the expert, the implementation of reciprocal tariffs by President Trump has reignited global trade tensions, creating fresh uncertainty across equity markets worldwide. International funds, particularly those with exposure to export-oriented economies, are experiencing heightened volatility.

“Countries such as China, Vietnam, Taiwan, South Korea, and Indonesia —known for maintaining higher trade barriers against U.S. goods—are likely to see pressure on their export growth and overall market sentiment. Key sectors such as automobiles, electronics, and manufacturing, which rely heavily on global supply chains, are expected to be most affected. Meanwhile, the U.S. economy is also facing headwinds, as rising input costs and retaliatory actions from trade partners begin to weigh on corporate margins and broader market performance,” he added.

The Hang Seng ETF went down by nearly 1.16% in the last three days and by 1.52% on April 3. The index has been in red in the last one month. S&P 500 index went down by 4.84% in one day and by 3.84% in the last three days.

In the last one day, the international funds have dropped by upto 6%. Out of 65 international funds, around 46 have offered negative returns in the last one day and 19 have delivered positive returns.

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SBI International Access-US Equity FoF, the biggest loser, lost around 6.03%, followed by Mirae Asset Global X Artificial Intelligence & Technology ETF FoF which went down by 5.79% in the same period.


ICICI Pru NASDAQ 100 Index Fund and Navi NASDAQ 100 FoF went down by 5.35% each in one day. Mirae Asset Hang Seng TECH ETF FoF went down by 3.17% in one day. HSBC Brazil Fund offered the highest return of around 1.77% in one day, followed by Mahindra Manulife Asia Pacific REITs FOF which gave 1.66% return in the same period. Bandhan US Treasury Bond 0-1 year FoF gave the lowest positive return of around 0.11% in one day.

With the majority of international funds in red, the expert shares that the outlook for international funds has turned cautious to neutral considering renewed tariff risks and with both emerging and developed markets facing external headwinds, investors should expect higher volatility and uneven performance across regions.

“However, this environment also rewards selectivity — funds that are diversified across regions and sectors, or are actively managed with tactical flexibility, may be better positioned. Overall, a balanced allocation between U.S. and international funds, with an emphasis on regions less vulnerable to U.S. trade policy, could be a prudent strategy until the global trade landscape becomes clearer. Given the current backdrop, caution continues to define the near-term outlook for international funds,” Shinde added.

One should always invest based on their risk appetite, investment horizon, and goals.

(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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