Hey I had an observation, and I’m not able to grasp the whole thing yet. So SEBI has restricted the mutual funds for overseas MF due to them hitting the $7B threshold. But there are MON100 and MAFANG which can still be bought and sold in NSE and BSE. How does that happen?
This restriction means that the mutual funds can no longer investment in foreign securities until either the investment value reduces below the threshold or the threshold is increased to a Higher limit.
So for now, the mutual funds can’t create or issue fresh units to the investors in relation to international investments.
However, this restriction doesn’t affect the existing investors in such international ETFs or MF, as they can still sell or redeem such units with other investors or with the MF.
You can refer to below thread for better clarity
1 Like
I have invested in both but via ETF. I can buy and sell without any issue as it between two customers. It does not exceed the limit requirement. Also I was told that based on the redemption in mutual fund if they have limit the AMC can issue new units.
However please note that via ETF, the market rate is higher than iNAV. There is a premium but it does not matter for me as I am holding it for long period and this difference I will make it up.
1 Like