Motilal Oswal Asset Management Company has suspended lump-sum investments and transfers into three of its overseas funds – S&P 500 Index Fund, MSCI EAFE Top 100 Select Index and Nasdaq 100 Fund of Fund from Monday.

The suspension of new investments in these schemes will continue until a further increase in the investment limit by the regulator, the fund house said.

Lump sum investment and exchange applications received after the January 14 deadline will not be processed, he said.

Redemption to continue

However, the investment restriction will not apply to the redemption, exchange and systematic withdrawal plan in these schemes, he added.

Motilal Oswal Nasdaq 100 FoF and ETF have assets under management of ₹4,471 crore and ₹6,273 crore while the S&P 500 Index Fund has a corpus of ₹2,737 crore. Launched last December, Motilal Oswal MSCI EAF (Europe, Australia and Far East) Top 100 Select Index has assets of ₹39 crore.

Investment threshold

Last June, capital market regulator SEBI raised the overseas investment limit for a mutual fund house to $1 billion from $600 million and capped the overall industry limit. mutual funds to $7 billion to help fund houses allocate a higher share of their corpus to foreign securities.

In addition, mutual funds may make investments in offshore exchange-traded funds subject to a maximum of $300 million per mutual fund, within the overall industry limit of $1 billion. of dollars. Previously, the investment limit was $200 million per fund house.

Mutual funds can either build a portfolio of foreign stocks directly or channel investments through any other foreign fund that invests in global markets. That aside, they also have the option of aping a particular global index through exchange-traded funds.

Buoyed by economic stimulus and a near-zero percent interest rate, global equity markets recorded double-digit growth for the third straight year in 2021, said Satish Ramakrishnan, an independent MF distributor.

Apart from some of the diversification, investors have joined the bandwagon to invest in global markets as the noise about Indian markets becoming overvalued grows louder, he added.

While the Nasdaq and S&P 500 gained 27% last year, the collective wealth of the world’s 500 richest people soared by more than $1 trillion thanks to soaring stock markets and rising prices. valuations.

Published on

January 17, 2022