InvestorQ : What does it mean that SEBI has doubled the overseas investment limits for foreign investments by Indian mutual funds?
Rutuja Nigam made post

What does it mean that SEBI has doubled the overseas investment limits for foreign investments by Indian mutual funds?

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3 weeks ago
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There are two aspects to this announcement. The first pertains to the investments abroad by funds as a diversification move. Then secondly, there is a regulation shift on the ETFs that invest in global ETFs as an indirect global investment. Let us look at both of these.

In a significant move, SEBI doubled the overseas investment limit per fund house from $300 million to $600 million, which was long called for. The overall MF industry has a limit of $7 billion to invest abroad. In addition, SEBI has also enhanced the limit for each fund house to invest in global ETFs from $50 million to $200 million, which is four-fold hike.

This could be music to the ears of investors and also for fund managers. Global funds have been one of the best performing asset classes in the last 10-15 years, especially after the global economies crisis and the series of stimulus measures.

In the recent months, demand for such international FOFs and ETFs has been gradually increasing. It also helps domestic investors diversify their portfolio risk from domestic factors. There are some very basic compliance requirements for the same.

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