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What are the Investment Avenues for Indians in International Mutual Funds?


If one is planning to invest abroad, one can do it by investing through mutual funds which are registered under SEBI. There are various investment options where you can invest depending on the risk criteria.


Indian Mutual Funds registered with SEBI are permitted to invest within the overall cap of USD 7 billion in:

What are the Investment Avenues for Indians in International Mutual Funds?

a) ADRs / GDRs of the Indian and foreign companies.

b) Equity of overseas companies listed on recognized overseas stock exchanges. There is also option to invest in initial and follow on public offerings for listing at recognized overseas stock exchanges.

c) Foreign debt securities- short term as well as long term with rating not below investment grade - in the countries with fully convertible currencies.

d) Money market investments not below investment grade; repos where the counter party is not below investment grade.

e) Government securities where countries are not rated below investment grade.

f) Derivatives traded on recognized stock exchanges overseas only for hedging and portfolio balancing with underlying as securities.

g) Short term deposits with banks overseas where the issuer is rated not below investment grade and


h) Units / securities issued by overseas Mutual Funds or Unit Trusts registered with overseas regulators.

International mutual funds majorly carry two risks that include currency and market risk. Besides such fund are also impacted by country-specific and geo-political factors.

Story first published: Friday, January 2, 2015, 10:36 [IST]
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