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New limits for international mutual funds based on redemption

New limits for international mutual funds based on redemption - (A)

As of February 1, 2022, international investment funds will be able to reinvest in shares of companies listed abroad to the extent of the redemptions and therefore sales of foreign shares that have suffered these systems.

These foreign investment limits came into effect on February 1, 2022, and since the limits were not raised, most fund companies had to stop accepting entries into their international programs.

SEBI had set an overall industry-wide limit of $7 billion for mutual funds to invest in foreign securities and an individual limit of $1 billion for each program.

In a letter to fund companies, the industry body the Association of Mutual Funds in India (AMFI) clarified that mutual funds “due to redemptions and the resulting sale of securities abroad after February 1 of 2022, use the margins available within the limit of investment abroad”. can”…

The investment limit has not been raised, but fund houses are now allowed to invest if they have sold international shares between February 1 and today.

The limited margin for mutual funds

Industry leaders say not all schemes will be able to reopen their funds as they would not have sold international shares. And others may have limited wiggle room because the buying pressure was not great and therefore the sell-off was not great.

The Mirae Mutual Fund has announced the reopening of international programs but with certain restrictions. SIP investments, existing or new, are not allowed. Only new lump sum investments of up to Rs 2 lakh per day per investor per system are allowed.

These apply to the Mirae Asset NYSE FANG+ ETF fund of funds, the Mirae Asset S&P 500 Top 50 ETF fund of funds, and the Mirae Asset Hang Seng TECH ETF fund of funds.

Edelweiss Mutual Fund and Nippon India MF have already announced that they will include contributions in their international programs.

Edelweiss ASEAN Equity Off-Shore Fund, Edelweiss Greater China Equity Off-Shore Fund, Edelweiss US Technology Equity Fund of Fund, Edelweiss Emerging Markets Opportunities Equity Offshore Fund, Edelweiss Europe Dynamic Equity Offshore Fund, Edelweiss US Value Equity Off-Shore Fund and Edelweiss The MSCI India Domestic & World Healthcare 45 Index Fund is open to new SIPs, equity investments, and systematic transfer plans.

Nippon India MF also announced the launch of its programs: 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.

ICICI Prudential MF has reopened its programs – ICICI Prudential US Bluechip Equity Fund, ICICI Prudential Global Stable Equity Fund (FOF), ICICI Prudential Global Advantage Fund (FOF), and ICICI Prudential Nasdaq 100 Index Fund – to new SIP listings and equity investments

Meanwhile, Parag Parikh Mutual Fund clarified that it cannot make new investments in foreign markets as it has not sold shares in foreign markets.

The Parag Parikh Flexicap fund remains open, but all new investor flows will continue to be used to buy shares on national stock exchanges.

Motilal Oswal MF will continue to suspend flows from new investors and existing SIPs for its international funds, as “there have been no major redemptions in recent months since the restrictions were put in place.”

These include the Motilal Oswal Nasdaq 100 ETF, the Motilal Oswal Nasdaq 100 Fund Of Fund, the Motilal Oswal NASDAQ Q 50 ETF, the Motilal Oswal S&P 500 Index Fund, and the Motilal Oswal MSCI EAFE Top 100 Select Index Fund.


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