Summary: Every international mutual fund in India has now stopped accepting new SIP registrations, leaving investors with only global ETFs or direct overseas investing. This story explains why the shutdown happened, the costs of each alternative and what investors should consider before making their next move.
On July 23, Baroda BNP Paribas Aqua, the last international fund still open to a new SIP, stopped accepting new SIP registrations and lumpsums. When this tracker began in early June, 12 funds were open to a new SIP; today, none are.
If you already run a global SIP, it carries on as before, instalments and all. What has closed is starting a new one.
How it came to zero
The cause runs through this whole story. India caps how much its funds can hold abroad, $7 billion across the industry, and once it breached that in January 2022, SEBI froze each fund house at its February 1, 2022 level. As markets lift those holdings, a house nears its ceiling and must stop taking new money. The funds have shut one by one since.
These suspensions are temporary, in theory. Any of these funds can reopen once its house’s overseas holdings fall back below the frozen line, whether markets dip, the rupee firms or investors redeem. A closed door, not a wall. But no one can say when it opens, so waiting is not a plan.
The only routes left, and what they cost
That leaves two ways in: buy an Indian-listed global ETF on the exchange, or send money abroad and invest directly. Both ask something of you. Start with the ETF, which trades every day and never closes. Its catch matters more now than ever: the market price sits above the value of its holdings, its NAV, because these funds stopped issuing new units when their quota filled in April 2024. Supply is fixed, demand is not, and with every fund now shut, money that would have gone into a SIP has nowhere to turn but these ETFs, which pushes the premium up rather than down. That is a real cost: pay 20 per cent over NAV and the holdings must climb 20 per cent before you break even.
This week: the dear ones got dearer. Hang Seng TECH rose from about 18 to 22 per cent, now the priciest of the six, and FANG+ from 17 to 20, while Nasdaq Q50 and Nippon India’s Hang Seng BeES eased and Nasdaq 100 held. Premium aside, check liquidity too, since a couple of these trade only a crore or two a day, so a limit order is wise.
Where each ETF’s premium stands now
The other way is to go direct. The Liberalised Remittance Scheme lets you send your own money abroad and buy foreign shares or funds yourself, outside the fund cap. It sidesteps the closures, but brings tax collected at source and the chore of choosing and holding everything yourself, which is why a fund was the simple option.
None of this changes why you would want money abroad: to spread a bet your job, home and savings already placed on one economy. If you are invested, stay put. If you want to begin, the call is whether an ETF at today’s premium is worth it, or whether to wait. That is what the Value Research Fund Advisor is built to help you weigh.
Already hold an international fund, or weighing an ETF? Check where it stands before you act.