Nippon India Mutual Fund (NIMF) has become the first fund house to announce the closing of its international schemes once again after the Securities and Exchange Board of India (SEBI) had given temporary limits to fund houses to invest in overseas stocks.
Nippon India MF had announced opening up of its schemes – Nippon India US Equity Opportunities Fund, Nippon India Japan Equity Fund, Nippon India Taiwan Equity Fund, Nippon India Multi Asset Fund and Nippon India ETF Hang Seng BeES – after market regulator SEBI said that fund houses could invest in overseas stocks to the extent they have sold such stocks since February 1, 2022.However, these limits have got utilised in a matter of a week, which is why Nippon India MF has decided to once again shut these schemes.
More fund houses could also be forced to shut their schemes once again as these new limits are not expected to be substantial. There have not been high redemptions in international schemes and so they have not had to sell lot of overseas stocks.
The overseas investing caps took effect on February 1 and as the limits were not enhanced, most fund houses had to stop accepting flows into their international schemes.
SEBI had specified an overall industry level limit of $7 billion for mutual funds to invest in overseas securities and an individual limit of $1 billion for each scheme.
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