Comparing Routes - 3

The ETF routes are strong here. Because US and UCITS ETFs trade live on an exchange, you can sell during market hours at a known price, as easily as you bought. For the major, heavily traded ETFs, there are always buyers, so selling is quick and easy. Individual foreign stocks behave the same way.

International mutual funds sell a little differently. You place a redemption request and transact at that day's NAV rather than at a live price, so there is a short, predictable delay rather than instant execution, largely making this a non-issue.

GIFT City varies by product. Exchange-traded instruments there can be sold much like other listed products, while some funds follow a redemption process closer to a mutual fund. The newer products and FoFs can have less trading activity, which can make selling less instantaneous than on the deep US market.

On the offshore routes, after you sell, your money is sitting abroad in dollars. To use it, you have to bring it back, which means a currency conversion and an inward transfer to India. The FX markup you met in Module 1 applies on this just as it did on the way out, so the currency cost is paid twice over the life of the investment. There is also a modest processing time for the money to move and settle.

The onshore route avoids this entirely. With an international mutual fund bought in rupees, there is no money abroad to repatriate. You redeem, and the proceeds arrive in your Indian bank account in rupees, with no separate conversion or inward transfer for you to arrange.

GIFT City, being LRS-funded and dollar-denominated, sits similarly as other offshore routes lke US and UCITS ETFs.

Most of the mainstream routes are free here. Directly held stocks and ETFs, whether US, UCITS, or exchange-traded, have no lock-in; you can sell whenever the market is open.

International mutual funds are generally open-ended too, meaning you can redeem when you wish, though some funds carry an exit load: a small charge for selling within a short window of buying, designed to discourage very short-term withdrawals.

The place to watch is the higher end of GIFT City. Some products there carry genuine lock-in periods during which your money simply cannot be withdrawn. This is not a retail concern for most people, but a reminder to check the exit terms of any specific product before committing.

Ease of exit, like every dimension before it, does not crown a single winner; it rewards different investors differently. That is the whole point of the comparison, and it is what the final chapter next resolves, bringing the profiles and all these dimensions together into a single decision about which route is right for you.