SEBI Increases Foreign Investment Limit for MFs

Securities and Exchange Board of India (SEBI) has increased overseas investment limit for local mutual funds.

Highlights

  • With this, mutual funds can make overseas investments to a maximum of US $ 1 billion per Mutual Fund out of overall industry limit of US $ 7 billion.
  • While in overseas Exchange Traded Fund, mutual funds can invest a maximum of US $ 300 million per Mutual Fund with industry limit of US $ 1 billion.

Mutual Fund

It is an open-end professionally managed investment fund that attracts money from many investors to purchase securities. Both retail or institutional investors can invest in mutual funds. Benefits of mutual funds include economies of scale, liquidity, diversification, and professional management. However, these benefits come with fees and expenses. Primary structures of mutual funds are open-end funds, closed-end funds, unit investment trusts and exchange-traded funds (ETFs).

Exchange-traded funds (ETFs)

ETF is a type of investment fund and exchange-traded product. They are similar to mutual funds. The only difference is, ETFs are bought & sold throughout a day while mutual funds are sold & bought on price basis at the end of specific day.  ETF holds assets like currencies, stocks, bonds & currencies and commodities like gold bars.

Month: 

Category: 

Topics: 

Latest E-Books

Comments