The opportunity to invest in foreign mutual funds is almost over! Only one scheme is open now
New investment options in international mutual funds have virtually dried up. Most fund houses have stopped new SIPs due to regulatory limits being reached. Currently, only one scheme is accepting SIPs and lump sum investments from new investors.
RJ Kesari News Desk: If you're planning to start a new SIP in an international mutual fund, your options are virtually exhausted. Due to regulatory limits, most asset management companies (AMCs) have prohibited new SIP and lump-sum investments in international funds.
Currently, the Baroda BNP Paribas Aqua Fund of Funds (FoF) is the only international mutual fund in India that accepts both SIP and lump-sum investments from new investors.
Why are international funds closing?
This ban is not due to poor fund performance, but rather due to regulatory limits. The Indian mutual fund industry already has a set overall limit on investments in foreign securities.
Many fund houses have exhausted their available limits and are therefore unable to accept new investments. This is why 11 more international mutual fund schemes have recently closed new SIP registrations.
New investment option left in only one scheme
According to data from Value Research, of the 65 international mutual fund schemes, only Baroda BNP Paribas Aqua FoF is currently open for new SIP and lump sum investments.
However, experts say this situation is not permanent. If this fund house's foreign investment limit is reached, this scheme may also be closed to new investors.
Existing investors need not panic
The ban on new investments will not affect investors who have already initiated SIPs. In most cases, existing SIPs will continue as normal, and previously made investments will continue to increase or decrease based on market performance.
This restriction applies primarily to new investors and new SIP registrations. However, rules may vary from fund house to fund, so investors should check their AMC for the latest information.
What are the options for investors?
Experts say that if an investor's objective is solely global diversification, they may consider open-ended international funds for now or wait for future regulatory limits to increase.
Additionally, some investors may consider other legitimate foreign investment options. It's important to assess the risks, investment horizon, and financial goals before investing.
Experts believe that if foreign investment limits are raised in the future, many international mutual funds may reopen to new investments. Until then, options for investors looking to invest in global markets are likely to remain limited.