Nippon India Mutual Fund stops inflows in five international funds

A month after resuming inflows into its international funds, Nippon India Mutual Fund has decided to stop fresh investments in the schemes. The fund house has suspended lumpsum subscription, switch-ins and fresh registration of SIP/STP under the five schemes that invest in international stocks. The move is to protect the breach of the available overseas investment limit put by the Securities and Exchange Board of India.

On June 22, Nippon India Mutual Fund had announced opening up of its schemes – Nippon India US Equity Opportunities Fund, Nippon India Japan Equity Fund, Nippon India Taiwan Equity Fund, Nippon India Multi Asset Fund and Nippon India ETF Hang Seng BeES- after SEBI allowed fund houses to invest in overseas stocks to the extent they have sold since February 1, 2022.

“Post the resumption of the subscription in certain NIMF schemes investing in overseas securities, there has been substantial utilization of available overseas investment limit. Therefore, with a view to avoid breach of the overseas investment limit as of EOD of February 1, 2022, we propose to suspend lumpsum subscription, switch-ins and fresh registration of SIP/STP or such other special product under the following NIMF schemes, w.e.f June 29, 2022,” the AMC said in a notice.

Analysts expect many fund houses to follow suit because the actual limit of investing in international stocks hasn’t been increased by Sebi. There is an overall industry level limit of $7 billion for mutual funds to invest in overseas securities and an individual limit of $1 billion for each scheme. This limit was breached on February 1st, this year.

Later, Sebi had allowed mutual funds to invest in accordance with the outflows from the international funds. However, the new limit has been depleted within a month for Nippon India MF.

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