With Donald Trump’s victory in the 2024 US presidential election, investing in US stocks has suddenly become popular. According to Reuters, the S&P 500 index briefly exceeded the 6,000 mark, closing with its biggest weekly gain in over a year.
As a result, several Indian investors have started considering investment options in the US market. There are several mutual funds in India that invest in foreign securities or foreign mutual funds.
It may be noted that Sebi recently issued a circular allowing Indian mutual funds to invest in foreign funds and unit trusts with exposure to Indian equities as long as it is limited to 25 per cent of their total asset size. Worth it. Through this regulation, Sebi aims to ease investment in foreign mutual funds and bring transparency to investments.
If the exposure exceeds 25%, Indian mutual fund schemes will have a six-month compliance period from the date of disclosure of information regarding such breach to rebalance their assets.
4. DSP US Flexible Equity Fund of Funds
5. Edelweiss US Technology Stock FoF
6. Edelweiss US Value Equity Offshore Fund
7. Franklin India Feeder Franklin American Opportunity Fund
8. Invesco India – Invesco EQQQ NASDAQ-100 ETF FoF
10. Mirai Asset NYSE FANG+ ETF FoF
11. Mirai Asset S&P 500 Top 50 ETF FoF
12. Motilal Oswal Nasdaq 100 FOF
Can I invest in US stocks and mutual funds?
Mutual funds that invest in foreign securities will stop accepting new deposits from April 2022, and funds of funds (FOF) that invest in ETFs listed on foreign stock markets will also stop accepting new deposits from April 2024. It stopped.
This is because Indian mutual funds are limited to investing in foreign stocks up to a cumulative maximum of $7 billion and investing in overseas listed exchange traded funds (ETFs) to a cumulative maximum of $1 billion. Ta.
Most fund houses have therefore stopped accepting new deposits into these US-centric schemes.
“Most mutual fund companies are not accepting new deposits due to SEBI’s restriction on not allowing Indian mutual funds to invest more than $7 billion in foreign securities (the cap was reached in April 2022). However, you can always invest in the US market if the opportunity arises in the near future. You can invest in the NASDAQ, which gives you exposure only to IT stocks, or you can invest in the entire US market by investing in a fund of funds.In my opinion, investing in a fund of funds is an ETF. ,” says Sridharan S, Sebi-registered investment advisor and founder of Wealth Ladder Direct.
