Edelweiss Mutual Fund, one of India’s largest fund houses, has placed restrictions on investments in seven of its schemes that invest in global securities.
These limits will come into effect from February 27. As of the December quarter, Edelweiss Mutual Fund managed assets worth approximately Rs 1.43 lakh crore.
The fund house stated that some of its schemes are nearing the foreign investment limit, which led to the decision.
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New Investment Limits Effective February 27
Edelweiss Mutual Fund, India’s 13th largest asset management company (AMC), has announced that from February 27, new investments through lumpsum, switch-in, systematic investment plans (SIPs), systematic transfer plans (STPs), etc. will be limited to Rs 1 lakh per PAN per day.
Exemptions Until February 25
The fund house clarified that the restriction will be based on the transaction reporting date.
Any transactions recorded before the cutoff time on February 25, 2025, including switch-ins, will not be subject to these limits. Additionally, existing SIPs and STPs will remain unaffected.
Schemes Affected by the Restrictions
The following Edelweiss Mutual Fund schemes will be affected by the new restrictions:
Edelweiss ASEAN Equity Off-shore Fund
Edelweiss Greater China Equity Off-shore Fund
Edelweiss US Technology Equity Fund of Fund
Edelweiss Emerging Markets Opportunities Equity Off-shore Fund
Edelweiss Europe Dynamic Equity Off-shore Fund
Edelweiss US Value Equity Off-shore Fund
Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund
Out of these, six funds primarily invest in foreign securities, while Edelweiss India Domestic & World Healthcare Fund invests in leading companies from India and the United States.
SEBI’s Regulations on Foreign Investments
In February 2022, the Securities and Exchange Board of India (SEBI) directed mutual fund companies to halt new investments in foreign stocks to prevent exceeding the $7 billion limit set by the Reserve Bank of India (RBI).
RBI also imposed a $1 billion limit for individual fund houses and another $1 billion cap for foreign exchange-traded funds (ETFs).
However, SEBI later allowed mutual funds to resume foreign investments, provided they adhered to the RBI-imposed limits.
Strong Returns from Global Funds
According to Value Research data, China equity funds have delivered an impressive 55.38% return over the past year (as of February 21).
Meanwhile, US-based funds, including those tracking Nasdaq 100, S&P 500, and NYSE Feng, have seen 26% returns in one year. Funds investing in global equities have gained 17.48% during the same period.
Currently, about 70 Indian mutual fund schemes manage around Rs 65,000 crore in assets, investing in global themes such as artificial intelligence, emerging technologies, semiconductors, and electric vehicles.