Motilal Oswal Mutual Fund has announced re-opening of its index funds investing in overseas stocks for investors. The fund house will be accepting up to Rs 2 lakh per calendar month, per permanent account number (PAN) from December 1, 2022 in three schemes. This limit of Rs 2 lakh is also per scheme.
The fund house has communicated that it will be accepting investments as lumpsum or switch-in into Motilal Oswal S&P 500 Index Fund, Motilal Oswal MSCI EAFE Top 100 Select Index Fund and Motilal Oswal Nasdaq 100 Fund of Fund. The fund house will not be accepting money in these schemes through systematic investment plans and systematic transfer plans.
Though the fund house won’t accept any SIP in the aforesaid schemes, the investors are allowed to invest in tranches in them. Each of these investments will be treated as a separate subscription and units will be allotted, as far as the investor does not cross Rs 2 lakh-mark in a given calendar month.
Association of Mutual Funds in India (AMFI) had notified in June 2022, that mutual fund schemes may resume subscriptions and make investments in overseas funds or securities up to the headroom available without breaching the overseas investment limits as on February 01, 2022.
The fund house further clarified that there are no restriction on investments in other schemes. The units of exchange traded funds investing in overseas stocks continue to trade on the stock exchanges. There are no restrictions on redemptions of units of any scheme, or registrations of systematic withdrawal plans.
The largest international stocks focused schemes – Motilal Oswal Nasdaq 100 ETF manages assets worth Rs 5,033 crore as on October 31, 2022. The scheme has lost 21.01 percent in last one year ended November 21, 2022. International funds as a category has lost on an average 16.07 percent over the same period, as per Value Research.Savvy investors use equity funds investing in international stocks to achieve diversification in their portfolios. Since these schemes invest in shares of companies listed overseas, investors are exposed to timing risk, which can be reduced by staggering investments in these funds.