There are several international mutual fund schemes available in the market giving Indian investors an exposure to stocks across countries and varied themes.
If you are investing in mutual funds that invest abroad, you will have to tweak your foregin investment strategy. SEBI has directed all asset management companies to stop accepting fresh inflows in mutual fund schemes which have a mandate to invest in overseas securities without the optionality to invest in Indian securities. It remains to be seen when the restriction is lifted by the regulator.
The reason to stop allowing fund houses to collect fresh funds is in view of the impending breach of the industry-wide overseas investment limit of US $ 7 billion as currently permitted by RBI. Therefore, temporarily, all fresh purchases, switch-in, new SIP or STP registration will not be able to mde in international funds. However, existing systematic investments (SIPs/ STPs) in these funds will continue till any further notice by the regulator or the fund house.
Within the overall industry limit of US $ 7 billion, Mutual Funds can make overseas investments subject to a maximum of US $ 600 million per Mutual Fund scheme and US $ 50 million would be reserved for each Mutual Fund individually. And, for investments in overseas Exchange Traded Fund (ETF(s), within the overall industry limit of US $ 1 billion, Mutual Funds can make investments up to a maximum of US $ 200 million per Mutual Fund.
There are several international mutual fund schemes available in the market giving Indian investors an exposure to stocks across countries and varied themes. Some of them include funds investing in US markets, global stocks, gold, energy, agriculture in international context.
Back in November 2020, the market regulator SEBI had enhanced the overseas investment limit for mutual funds. The limit applies to the overall industry and will also have a separate limit for mutual funds individually and Exchange Traded Funds (ETFs).
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