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Why are Indian investors not able to buy international mutual funds?

There are several mutual fund houses in India that offer international mutual funds to Indian investors.

Why are Indian investors not able to buy international mutual funds?
From mutual funds to fund of funds to ETF, the global equity market offers diverse opportunities to Indian investors.

2022 has been a washout year for the US technology stocks. Nasdaq 100, the index primarily comprising technology and communication stocks, is down by nearly 28% YTD in 2022. As an Indian investor looking to diversify across foreign stocks, some of the most popular stocks are Apple, Amazon, Tesla, Microsoft, Meta, and Google amongst others. However, other than the options available to take exposure in US stocks through an international trading platform, the window to buy international mutual funds in India is almost shut.

There are several mutual fund houses in India that offer international mutual funds to Indian investors. The total amount of offshore investment in the mutual fund sector is limited to a maximum of US$7 billion, in accordance with SEBI regulations. The maximum amount of overseas investments that any mutual fund house may have is $1 billion USD.

International mutual funds

ABSL Global Emrgng Opp

ABSL Intl Eqt A

ABSL NASDAQ 100 FOF

Axis Global Eqt Alpha FoF

Axis Grtr China Eqt FoF

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Axis NASDAQ 100 FoF

DSP Global Allocation

DSP US Flexible Eqt

Edelweiss ASEAN Eqt Off Shore

Edelweiss Emrgng Mkt Opp Eqt Offshr

Edelweiss Grtr China Eqt Off-shore

Edelweiss US Tech Eqt FoF

Franklin Asian Eqt Dir

Franklin Ind Feeder Franklin US Opp

Franklin Ind Feeder Templeton European Opp

However, to buy international stocks in dollars, the combined limit of $7 billion, was about to be breached by them. SEBI subsequently imposed a restriction on fund houses offering overseas funds from February 02, 2022.

The total upper limit of US$7 billion for the sector as a whole includes a separate upper threshold of US$1 billion for mutual fund schemes investing in ETFs (listed overseas) and they are still open to investors. However, the pricing of these ETFs may be a concern with restrictions in place.

Also Read: US stock market gearing up for a Santa Claus rally?

International mutual funds

HDFC Developed World Indexes FoF

HSBC Asia Pacific (ExJapan) Div Yld

HSBC Brazil

HSBC Global Emrgng Mkts

HSBC Global Eqt Climate Change FoF

ICICI Pru Global Advtg (FOF)

ICICI Pru Global Stable Eqt (FOF)

ICICI Pru NASDAQ 100 Index

ICICI Pru Strategic Metal and Energy Eqt FoF

IDFC US Eqt FoF

Invesco (I) Global Eqt Incm FoF

Invesco Ind-Invsco EQQQ NSDQ-100 ETF FoF

Further, from June 17, 2022, SEBI had permitted the AMCs to resume subscription and make investments in overseas funds/securities up to the headroom available without breaching the overseas investment limit as of February 01, 2022.

International mutual funds

Kotak Global Emrgng Mkt

Kotak Global Innovation FoF

Kotak Nasdaq 100 FOF Dir

Mirae Asset Global Electric & Autonomous Vehicles ETFs FoF

Mirae Asset Global X Artificial Intelligence & Tech ETF FoF

Mirae Asset Hang Seng TECH ETF

Mirae Asset Hang Seng TECH ETF FoF

Mirae Asset NYSE FANG+ ETF

Mirae Asset NYSE FANG+ ETF FoF

Mirae Asset S&P 500 Top 50 ETF

Mirae Asset S&P 500 Top 50 ETF FoF

The revision in the overseas investment limit may be the need of the hour. The US stock market provides ample opportunities to investors for diversifying and managing country risks. Currently, two things are not going in favour of US stocks, especially from the tech sector – one, the high valuation that they enjoyed in the low-interest rate regime is no more there as rates are going up, and secondly, the changing economic environment is putting pressure on their core business activities.

International mutual funds

Motilal Oswal MSCI Top100 Select Index

Motilal Oswal NASDAQ 100 ETF

Motilal Oswal Nasdaq 100 FOF

Motilal Oswal Nasdaq Q 50 ETF

Motilal Oswal S&P 500 Index Fund

Navi NASDAQ 100 FoF

Navi US Total Stock Mkt FoF

International mutual funds

However, any bounce back by these top-notch companies in their business operations cannot be ruled out. To a long-term investor, making allocations in them when the valuations have fallen is an opportune time.

Nippon Ind ETF Hang Seng BeES

Nippon Ind Japan Eqt

Nippon Ind Taiwan Eqt

Nippon Ind US Eqt Opp

PGIM Ind Emrgng Mkts Eqt

PGIM Ind Global Eqt Opp

SBI Intl Access-US Eqt FoF

Sundaram Global Brand

From mutual funds to Fund of Funds to ETFs, the global equity market offers diverse opportunities to build an international portfolio that can bring diversification to the domestic portfolio to the investor.

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First published on: 19-11-2022 at 05:42:00 am