
Mutual funds in India are not explicitly permitted onto investing in overseas mutual funds, which have exposure to Indian securities. As a result of this, several mutual funds refrain from doing so.
However, in view of strong economic growth prospects of India, Capital markets regulator SEBI has offered an attractive investment opportunity for foreign funds, which will result into international indices, ETFs and mutual funds allocate a portion of their assets to Indian securities.
This move will help keeping Indian funds 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, mutual funds (MFs), unit trusts (UTs), and exchange traded funds (ETFs), allocate a portion of their assets to Indian securities, noted SEBI.
As of March 31, 2024, JP Morgan’s Emerging Markets Opportunities Fund’ has around 15 per cent in Indian Investment. Similarly, MSCI Emerging Markets Index holds a little over 18 per cent weighted to Indian securities, as per latest data of April 30, 2024.