New Delhi, Nov. 14 -- Nvidia's sharp stock decline has raised concerns among Indian investors holding mutual funds that invest in US equities. However, the impact on most diversified international funds has been relatively limited, with losses ranging between 1% and 3.2%, despite the chipmaker's shares falling 13% in a week.

The bigger risk for Indian investors may lie elsewhere, as some US-focused exchange-traded funds (ETFs) are trading at substantial premiums to the value of their underlying holdings. This exposes buyers to potential losses even if the stocks themselves remain unchanged.

Nvidia shares fell 13% in the week ended November 11. The stock declined another 4.3% the following day after its board opened an inquiry into chief...