Indian investors are keen to be part of China's growth story and also ride the tech wave sweeping the US stock markets, but they have limited options.
Though investing in international markets through mutual funds has proven effective, regulatory norms restrict this path.
In February 2022, the Securities and Exchange Board of India (SEBI) asked domestic mutual fund companies to stop further investments in foreign stocks. It was to prevent a breach of the Reserve Bank of India’s industry-wide limit of $7 billion on investments in overseas securities and funds. The central bank also capped at $1 billion the limit for individual fund houses and $1 billion for investing in overseas exchange-traded funds (ETFs).
Later, the capital market regulator allowed mutual funds to invest in foreign stocks as long as their fund deployment adhered to the RBI ceilings.
Many fund houses have since then sporadically accepted subscriptions. At present, 43 of the 76 international schemes are accepting subscriptions. Out of these 43, all schemes - except one - allow SIP subscriptions, but many are closed for lump-sum investments. Most of them have also resumed switch-out or instalments of Systematic Transfer Plans transactions. Investors should consult financial advisers before putting money into these schemes.
Here is a list of international schemes that are open for fresh subscriptions. Do remember that the fund houses reserve the right to suspend subscriptions when they are close to the headroom limit.
The funds overseas equity assets across international fund of funds, direct equities and international ETFs are valued at over Rs 70,000 crore. The mutual fund industry believes there is a strong case for relaxing the investment caps and has raised the issue with the regulator as well.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Also see: Chasing Chinese dragons: What's in store for Indian mutual fund investors?
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
