DSP Global Innovation FoF: Sebi asks DSP Global Innovation FoF to limit overseas investments to ETFs

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Capital markets regulator Sebi has advised the DSP Global Innovation Fund of Fund (FoF) to limit its overseas investments to ETFs only and wait for the Reserve Bank of India to raise the limit by $7 billion. fixed for mutual funds before investing in active funds.

“Sebi has advised us that DSP Global Innovation Fund of Fund should initially only invest in foreign ETFs until the $7 billion limit is increased in consultation with RBI,” a note from DSP MF to investors reads. The fund house hopes that the regulator will soon increase the limits and that it can invest according to its original design.

DSP Global Innovation Fund of Fund, where the NFO is currently open, was to invest in a combination of global active funds and ETFs which, in turn, invest in innovation and technology driven companies. About 30% of its corpus was to be invested in two ETFs namely, iShares NASDAQ 100 UCITS ETF and iShares PHLX Semiconductor ETF, the balance 70% in four actively managed funds – BGF World Tech Fund D2 USD, Nikko AM ARK Disruptive Innovation Fund, Morgan Stanley US Insight Fund and Bluebox Global Technology Fund.

Last week, Motilal Oswal Mutual suspended lump-sum investments and money transfer in three of its international funds, namely Motilal Oswal S&P 500 Index Fund, Motilal Oswal Nasdaq 100 Fund of Fund (FoF) and Motilal Oswal MSCI EAFE Top 100 Select Index. Funds.

Sebi specified an industry-wide limit of $7 billion for mutual funds to invest in foreign securities and mutual funds, and a separate limit of $1 billion for investments in foreign funds. exchange-traded (ETF) abroad. While the offshore ETF limit is still a long way off, some other international strategies have seen healthy flows and the $7 billion limit for offshore securities/mutual fund investments may soon be exhausted .

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