The Securities and Exchange Board of India (SEBI) has directed the Association of Mutual Funds to stop inflows into overseas exchange traded funds from 1st April.

Banking & Finance

The Securities and Exchange Board of India (SEBI) has directed the Association of Mutual Funds to stop inflows into overseas exchange traded funds from 1st April. International mutual fund (MF) schemes, previously restricted from investing directly in foreign instruments, are now directed to cease accepting fresh investments in schemes that invest in overseas exchange-traded funds (ETFs). Data from Amfi shows that 13 international MF schemes invest in international passive funds (ETFs and index funds), collectively managing Rs7,743 crore. Additionally, many other MF schemes allocate a small portion of their corpus to international ETFs. A large fund house recently proposed to the RBI to link the international investment limit to India’s foreign exchange reserves.


      The assets under management (AUM) of international MF schemes have modestly increased in the past two years, growing to Rs24,700 crore (as of February 2024) from Rs22,700 crore in January 2022.

     

     

 

     


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