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Sebi proposes facilitating investments by mutual funds in overseas funds
Capital markets regulator Sebi on Friday proposed facilitating investments by mutual funds in overseas funds, which invest certain portion of their assets in Indian securities.
This is subject to the fact that the total exposure to Indian securities by such overseas funds should not be more than 20 per cent of their net assets, Sebi said in its consultation paper.
The move would help keep Indian fund of funds (FoFs) true to their label, coupled with cost effectiveness, for investors.
Considering strong economic growth prospects of India, the country's securities offer an attractive investment opportunity for foreign funds and accordingly, various international indices, exchange traded funds (ETFs), mutual funds (MFs), unit trusts (UTs) allocate a portion of their assets to Indian securities, Sebi noted.
As of April 30, 2024, the MSCI Emerging Markets Index has a little over 18 per cent weight to Indian securities. Similarly, JP Morgan's Emerging Markets Opportunities Fund' holds .