scorecardresearchThese overseas mutual fund schemes to open up for fresh investment from January 1

These overseas mutual fund schemes to open up for fresh investment from January 1

Updated: 21 Dec 2022, 11:36 AM IST
TL;DR.
Motilal Oswal Asset Management will start accepting fresh investment in five of its overseas funds
Last January, market regulator imposed a complete ban on mutual fund (MF) investment in the overseas market as the AUM of these schemes was inching close to the prescribed limit of $7 billion.

Last January, market regulator imposed a complete ban on mutual fund (MF) investment in the overseas market as the AUM of these schemes was inching close to the prescribed limit of $7 billion.

Motilal Oswal Asset Management will resume accepting new investment in its overseas funds from January 1, reported Business Line

These funds are Nasdaq 100 ETF, Motilal Oswal S&P 500 Index Fund, Nasdaq 100 Fund of Fund, Nasdaq ‘Q’ 50 ETF and MSCI EAFE Top 100 Select Index.

Last January, market regulator SEBI imposed a complete ban on mutual fund (MF) investment in the overseas market as the asset under management (AUM) of these schemes was inching close to the prescribed limit of $7 billion. 

There is a separate limit of $1 billion for investment in overseas ETFs (Exchange Traded Funds).

With the sharp fall in overseas market, widespread redemption and rupee depreciation, SEBI in June reopened overseas investment subject to the headroom available.

“We will start accepting fresh subscriptions in these schemes via lump sum and systematic investment options such as SIPs, STPs without any restrictions,” said Motilal Oswal AMC in a statement on Tuesday.

The previously paused systematic investment options will also be resumed and processed as per their registration, it added.

In the event of complete exhaustion of the available headroom being currently used to resume overseas investments, all subscriptions will be paused again and investors will promptly be notified of any such update on this matter, it said.

Aside from this, the MF industry has made a representation to the Reserve Bank of India to increase the overseas investment limit for the industry.

The AUM of fund of funds investing overseas has dipped six per cent last month to 20,863 crore against 22,128 crore in January. The inflows in these schemes have dried down to 18 crore from 389 crore in the same period.

First Published: 21 Dec 2022, 11:36 AM IST