June 23, 2022
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Some MFs reopen subscription to global funds
A few AMCs offering schemes that invest in overseas stocks have started accepting fresh inflows from investors after a gap of nearly five months.
On January 31, markets regulator Securities and Exchange Board of India had directed AMCs to stop accepting fresh inflows into overseas schemes after the $7-billion industry-wide investment threshold got breached.
While the investment ceiling hasn’t been raised, the turmoil in the market seen this year has once again created investment legroom.
Industry body Association of Mutual Funds in India on Tuesday clarified that AMCs can utilise the headroom available in the overseas investment limit created due to redemptions and consequent sale of overseas securities after February 1.
It further said that the total utilisation of the overseas investment limit by each AMC shall remain capped at the amount as of February 1.
Data from Value Research shows the total assets under management (AUM) for the international funds category has declined from Rs 42,689 crore at the end of January to Rs 38,999 crore in May. AUMs have declined further as markets have seen a sharp fall this month.
Edelweiss AMC said it has revoked the temporary suspension in seven of its international offerings with effect from June 21.
ICICI Prudential AMC, too, approved resuming subscriptions in five of its schemes with effect from June 22.
Experts said the reopening of subscriptions is positive news for the industry, as well as investors who would want to make use of this correction to deploy fresh funds.
The industry might get additional flows between Rs 3,000 crore and Rs 4,000 crore in the days to come.
The Fund houses now expect the regulator to soon take some decision on raising the overall investment limit.
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