SBI Mutual Fund to accept investments in SBI International Access–US Equity FOF

SBIUS manages assets worth Rs 788 crore and has given 15.98 percent returns in one year, as of July 4.

SBI Mutual Fund, the largest mutual fund house in India, has announced that it will accept inflows in the SBI International Access – US Equity FOF (SBIUS). On July 3, the scheme started accepting money in lumpsum, switch in, systematic investment plans (SIP), systematic transfer plans (STP) as well as transfer of IDCW.

SBIUS is an open-ended fund of funds scheme investing in mutual fund scheme or ETFs that invest in US markets. The scheme has invested in the units of Amundi Funds US Pioneer Fund. SBIUS manages assets worth Rs 788 crore and has given 15.98 percent returns in one year, as of July 4. International funds, on an average, have given 13.89 percent returns in the same period, according to per Value Research.

Mutual Fund houses were told to stop accepting money in international schemes in February 2022, when the limit set for the mutual fund industry to invest overseas was breached.

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Volatile markets in CY2022 led to some redemptions in international schemes and there is a scope to accept money.

In June 2022, capital market regulator Securities and Exchange Board of India allowed mutual fund houses to accept money in schemes investing overseas up to the headroom available without breaching the overseas investment limits as of February 1, 2022, at the mutual fund level.

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Also, valuations are attractive in some pockets in international markets that attract savvy investors. In view of these factors, Indian mutual fund houses are realigning their international offerings and opening their doors to investors. Recently Aditya Birla Sunlife Mutual Fund announced that it will merge Aditya Birla Sun Life International Equity Fund – Plan B (ABSB) and Aditya Birla Sun Life Commodity Equities Fund – Global Agri Plan (ABSC) into Aditya Birla Sun Life International Equity Fund – Plan A (ABSA).

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PGIM Mutual Fund has also decided to allow investments in schemes investing overseas through systematic investment plans (SIP) and systematic transfer plans (STP), along with lumpsum investments from July 3. PGIM India Global Equity Opportunities Fund, PGIM India Emerging Markets Equity Fund, PGIM India Global Select Real Estate Securities Fund of Funds are the fund house’s three schemes that will accept subscriptions.

Also read | PGIM India MF allows fresh SIPs in international schemes

Investors looking for meaningful diversification in their portfolios can consider investing in overseas equities, which offer them the chance to benefit from growth businesses that may not be available in Indian equity markets. Semiconductor manufacturing, artificial intelligence, e-commerce, and precious metal mining are examples of such sectors.

Investors should ideally stagger their investments and invest with a minimum five-year timeframe while investing in the international equity funds offered by Indian mutual fund houses. It is better to consider index funds over thematic funds and avoid chasing short-term performance.