Each MF can now invest up to $300 mn overseas
Further, to create a level playing field between new and existing players, the sub-ceiling linked to net assets of a mutual fund house has been dispensed with.
By TNN |
MUMBAI: Investment norms for mutual funds (MFs) have been further liberalised. The Securities and Exchange Board of India (SEBI) on Thursday raised the limit for overseas investment for each mutual fund from $200 million to $300 million.
Further, to create a level playing field between new and existing players, the sub-ceiling linked to net assets of a mutual fund house has been dispensed with. Also, the requirement of 10 years of experience of investing in foreign securities for being eligible to invest in overseas Exchange Traded Funds (ETFs) has been dispensed with. Now, there is only an overall limit of $5 billion for the overseas investments.
Investors can expect more product offerings from the mutual fund stable as the gamut of investments that MFs could invest in has been widened. The new categories of overseas instruments that has been added include ADRs/GDRs issued by foreign companies, IPO and FPOs for listing at recognised stock exchanges overseas, derivatives for purpose of hedging and portfolio balancing.
Investors might even get a chance to indirectly invest in real estate abroad by investing in units that have mandates to invest in Real Estate Investment Trusts (REITs) listed in recognised stock exchanges. Today, countries like Hong Kong, Japan, US, Australia, Singapore offer REITs. Among the other new categories of investments are foreign debt securities, short term deposits, repos, government securities, money market instruments.
“Although the limit of $4 billion has not yet been used by funds, the latest announcement is a good step,” says Mukul Gupta, CEO of Birla Sun Life AMC. “It will encourage more Indians to invest abroad and participate in the global equities scenario besides get the benefits of diversification,” he said.
Further, to create a level playing field between new and existing players, the sub-ceiling linked to net assets of a mutual fund house has been dispensed with. Also, the requirement of 10 years of experience of investing in foreign securities for being eligible to invest in overseas Exchange Traded Funds (ETFs) has been dispensed with. Now, there is only an overall limit of $5 billion for the overseas investments.
Investors can expect more product offerings from the mutual fund stable as the gamut of investments that MFs could invest in has been widened. The new categories of overseas instruments that has been added include ADRs/GDRs issued by foreign companies, IPO and FPOs for listing at recognised stock exchanges overseas, derivatives for purpose of hedging and portfolio balancing.
Investors might even get a chance to indirectly invest in real estate abroad by investing in units that have mandates to invest in Real Estate Investment Trusts (REITs) listed in recognised stock exchanges. Today, countries like Hong Kong, Japan, US, Australia, Singapore offer REITs. Among the other new categories of investments are foreign debt securities, short term deposits, repos, government securities, money market instruments.
“Although the limit of $4 billion has not yet been used by funds, the latest announcement is a good step,” says Mukul Gupta, CEO of Birla Sun Life AMC. “It will encourage more Indians to invest abroad and participate in the global equities scenario besides get the benefits of diversification,” he said.
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