Want to invest overseas? Here's a list of mutual funds that are open for subscription
Indian investors are keen to be part of China’s growth story and also ride the tech wave sweeping the US stock markets, but they have limited options.
Though investing in international markets through mutual funds has proven effective, regulatory norms restrict this path.
In February 2022, the Securities and Exchange Board of India (SEBI) asked domestic mutual fund companies to stop further investments in foreign stocks. It was to prevent a breach of the Reserve Bank of India’s industry-wide limit of $7 billion on investments in overseas securities and funds. The central bank also capped at $1 billion the limit for individual fund houses and $1 billion for investing in overseas exchange-traded funds (ETFs).
Later, the capital market regulator allowed mutual funds to invest in foreign stocks as long as their fund deployment adhered to the RBI ceilings.
Many fund houses have since then sporadically accepted subscriptions. At present, 43 of the 76 international schemes are accepting subscriptions. While all these schemes allow SIPs, many are closed for lump-sum subscriptions. Most of them also resumed switch-out or instalments of Systematic Transfer Plans transactions. Investors should consult financial advisers before putting money into these schemes.
Here is a list of international schemes that are open for fresh subscriptions. Do remember that the fund houses reserve the right to suspend subscriptions when they are close to the headroom limit.
International MF schemes that are open for fresh subscription currently
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The funds overseas equity assets across international fund of funds, direct equities and international ETFs are valued at over Rs 70,000 crore. The mutual fund industry believes there is a strong case for relaxing the investment caps and has raised the issue with the regulator as well.
Also see: Chasing Chinese dragons: What’s in store for Indian mutual fund investors?