Motilal Oswal Asset Management Co. Ltd on Tuesday said it has temporarily stopped existing investments including, systematic investment plan (SIP) and systematic transfer plan (STP), into its S&P 500 Index Fund, MSCI EAFE Top 100 Select Index Fund and Nasdaq 100 Fund of Fund from 1 April 2022.
The asset management company has taken the decision on account of limitation on industry-wise overseas investment exposure.
“It may be noted that any existing registered SIP/ STP received in above designed Schemes post the cut-off timing of March 31, 2022 shall not be accepted and processed; however, the existing registered SIP / STP would remain active in the system and shall be reactivated after the receipt of further communication of enhancement of limit by regulators in this regard,” Motilal Oswal MF said in a circular.
The fund house also mentioned that the pause is not applicable to the redemption, switch-out systematic withdrawals and transfer out under the aforesaid schemes.
Earlier, the fund house through different circulars in January and February had stopped lump sum investments and fresh SIPs and STPs into these three schemes.
Motilal Oswal S&P 500 Index Fund and Motilal Oswal Nasdaq 100 FOF are among the biggest overseas funds in India with assets under management worth ₹2,631 crore and ₹3,986 crore, respectively, as of 28 February 2022. Motilal Oswal MSCI EAFE Top 100 Select Index Fund is a relatively new scheme with assets worth ₹41 crore.
The Securities and Exchange Board of India (Sebi) in January had advised mutual funds investing in overseas securities to stop further investments in foreign stocks to avoid breach of industry-wide overseas limits.
Mutual funds can make overseas investments up to $1 billion per mutual fund, with the overall industry limit of $7 billion, according to a Sebi circular of 3 June 2021. The suspension is likely to be temporary and could be revoked once the limits are enhanced by the regulator.
Other mutual fund houses have also stopped fresh SIPs/STPs and lump sum investments into their overseas funds.
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