paragraph

Just when the euphoria around global diversification had peaked, the market regulator Sebi ended the party in February, 2022. A temporary relief, however, has just been accorded. The Sebi has <a target="_blank" href="https://mintgenie.livemint.com/news/personal-finance/edelweiss-begins-accepting-inflows-as-sebi-allows-mutual-funds-to-resume-investing-in-international-stocks-151655795449794">allowed asset management companies (AMCs)</a> to start accepting fresh flows in international mutual fund schemes investing in overseas stocks. It had barred AMCs to invest in overseas stocks to avoid breach of industry-wide overseas limits as allowed by the central bank RBI.

Notably, mutual funds can make overseas investments up to $1 billion per fund house, with the overall industry limit of $7 billion.

The temporary relief has come in the wake of a recent fall in the global and domestic market that has triggered redemptions in the MF schemes. The fund houses can collect fresh subscriptions, up to the headroom available without breaching the overall overseas investment limit as on February 1, 2022 at the mutual fund level. It means only those MF schemes which have liquidated their positions in overseas securities primarily for meeting redemption requirements are authorised to make fresh investments. For example, PPFAS Mutual Fund didn’t register major redemptions over the last couple of months, hence it will not be accepting fresh flows. <a target="_blank" href="https://mintgenie.livemint.com/news/personal-finance/how-can-nris-invest-in-mutual-funds-in-india-151654763041122" rel="dofollow">READ MORE: How can NRIs invest in mutual funds in India</a>

“We have not sold any foreign investments and hence cannot remit funds outside. We will not be investing more in overseas investments pending limit increases,” says PPFAS Mutual Fund in a tweet.

Motilal Oswal Mutual Fund is also not accepting fresh money for the same reason.

Fund houses such as <a target="_blank" href="https://mintgenie.livemint.com/news/personal-finance/edelweiss-begins-accepting-inflows-as-sebi-allows-mutual-funds-to-resume-investing-in-international-stocks-151655795449794">Edelweiss AMC, ICICI Prudential AMC</a>, Nippon India Mutual Fund, PGIM India Mutual Fund and Mirae Asset Mutual Fund have informed investors about fresh subscriptions. Some are accepting lumpsum, switch-ins and fresh registration of SIP/STP while others have allowed only existing investors to run their SIPs. Mirae will be accepting only lumpsum up to ₹2 lakh per PAN card per day.

<h3>Approach your fund house before taking an action</h3>"Investors should use this opportunity to increase their exposure to international equities. As major international markets like the US and China have witnessed steeper corrections than Indian markets, investing in international funds would allow them to invest in quality global equities at attractive valuations. Renewed investments would also allow existing investors of international funds to average their existing investments at much lower NAVs,” says Naveen Kukreja, CEO &amp; Co-founder, Paisabazaar.

It is to be noted, however, the temporary relief is not enough. Rough estimates suggest only about a headroom of hundreds of millions before the industry limit is closer to be breached again.

It is time that the regulator takes a permanent action on industry limits. “SEBI and RBI should relax the limits of overseas investments for mutual fund investors in such a way that it should not be enhanced again and again. Best way is to make it as percentage of AUM of mutual fund industry,” says Nishant Batra, co-founder and Chief Goal Planner, Holistic Wealth. To simplify, just as the overall AUM of the industry increases, the limits should also be reset in the same proportion as defined by the regulators.

Meanwhile, you would do well to explore other options of international investments beyond the mutual fund schemes. For example, international ETFs are still accepting fresh flows because they have a separate $1 billion industry limit. You can also take direct exposure in international stocks through your broking firm. Most of the brokerages these days facilitate investments in foreign equities.

“As global macro-economic headwinds and rising inflation have increased the risk of further depreciation of the Indian Rupee, investing in international funds/stocks would allow investors a hedge against any adverse impact of falling rupee on their Indian investments. These funds/stocks would also be an excellent hedge for those investors whose children are pursuing education or planning to pursue education in overseas institutions,” says Kukreja. <a target="_blank" href="https://www.linkedin.com/in/aprajita-sharma-cfpcm-13660941/" rel="dofollow">Aprajita Sharma</a> is a freelance journalist and a certified financial planner. She can be reached at <a target="_blank" href="https://twitter.com/apri_sharma" rel="dofollow">@apri_sharma</a> on Twitter and <a target="_blank" href="https://www.linkedin.com/in/aprajita-sharma-cfpcm-13660941/" rel="dofollow">LinkedIn</a>.

Re-opening of international mutual funds: What does it have in store for you?

The Sebi has allowed asset management companies (AMCs) to start accepting fresh flows in international mutual fund schemes investing in overseas stocks.

How does the RBI influence your borrowing decision by changing the repo rate

Fund managers advise investment in dynamic bond funds amid rate hike environment: Report

Planning for retirement? Stay clear of these common mistakes

Fintech firms seek six months extension from RBI to follow credit line rule: Report

Bajaj Finance to offer 7.6% interest on FDs

Should you use a reverse mortgage to pay for long-term care?

Got a savings goal? Consider forming a savings circle

These are the mistakes to avoid while you save for retirement

Your Questions Answered: Should you redeem your ELSS funds, and choosing between personal loan and top-up home loan

Parichay Investments: Sebi penalises 15 entities for manipulating stock prices

Earlier, Securities and Exchange Board of India (Sebi) had conducted an investigation in the trading in the scrip of PIL during July 2010 to August 2011. Pursuant to probe, it was alleged that a group of 63 connected entities referred to as 'Soni Group' were dealing in the shares of several companies and had contributed to the price and volume.

Zomato: Alipay Singapore sells 3% stake for ₹1,631 crore

According to the bulk deal data available with the National Stock Exchange (NSE), Alipay Singapore Holding Pte offloaded a total of 26,28,73,507 shares, amounting to 3.07 per cent stake in the company.

Crypto Coin TBAC Cracks After Luring Indians With 3,100% Returns

A crypto party in India is showing signs of trouble amid a wider market meltdown. Lax regulations heighten the risks, experts say.

Here are the world’s most expensive cities right now; No Indian city in top 10

New York and Singapore have emerged as the joint-most expensive cities to live in, according to a new worldwide survey.

Before Market Opens: Wall Street rejoices over hopes of slower rate hikes; 9 things to know at 9 am on December 1, 2022

The stock exchanges in the US clocked strong gains after the Fed Chair signalled the pace of rate hikes may get slower. The Indian market may continue its record-setting spree at the beginning of the new month.