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HSBC has shut all three of its international funds to fresh SIP registrations from August 26. They had reopened on August 18, and were the last ones accepting new investors.
The reason is the same: the overseas investment limit. SEBI caps each fund house at the overseas exposure it held on February 1, 2022, when the industry hit its USD 7 billion ceiling. HSBC has nearly spent its own headroom.
Of the 60 international funds, 25 have frozen even the instalments of SIPs registered earlier. None is open to a new registration.
What changed this week
| Fund / Invests in | Change | Effective | Invest a lumpsum | Start a new SIP | Continue an existing SIP |
|---|---|---|---|---|---|
| HSBC Global Emerging MarketsEmerging market equities | Closed to fresh SIP registrations, lumpsum and switch-ins | Aug 26 | No | No | Yes |
| HSBC Asia Pacific (Ex Japan) Dividend YieldAsia Pacific dividend payers | Closed to fresh SIP registrations, lumpsum and switch-ins | Aug 26 | No | No | Yes |
| HSBC BrazilBrazilian equities | Closed to fresh SIP registrations, lumpsum and switch-ins | Aug 26 | No | No | Yes |
The other routes
Other routes to own foreign shares remain open.
The simplest option is domestic equity funds that invest a small part of their portfolio overseas. We listed a few weeks ago the domestic equity funds that put a small slice of their portfolio into foreign equity, and they remain open to SIPs today. Pick one only if the fund itself suits your plan. The foreign exposure is a bonus, not the sole reason to buy.
The second is the Liberalised Remittance Scheme (LRS), which sends your own money abroad to a foreign brokerage account, up to USD 2,50,000 a financial year. It gives you the widest choice. But you must pick the investments yourself, deal with TCS and disclose foreign assets in your tax return.
The third is GIFT City, which became more accessible this week. These funds sit under the International Financial Services Centres Authority (IFSCA) rather than SEBI, and you buy them through the same LRS route, so the 2022 SEBI limit does not apply to them. The route is still new. Only a handful of funds are open to retail investors, and usually ask for a minimum investment of USD 5,000, about Rs 4.8 lakh, which puts them beyond the reach of many. This week, PPFAS cut the minimum on its two index funds there to USD 500, about Rs 48,000.
But accessibility remains limited. These funds do not offer SIPs. Each investment is a separate remittance with its own paperwork. For investment remittances, 20 per cent TCS applies to the amount above Rs 10 lakh in a financial year.
The ETF premium
Global ETFs traded on Indian exchanges are the closest alternative to an international mutual fund. But they trade at a premium, meaning their market price is above NAV. A separate USD 1 billion industry limit on overseas ETF investments came close to exhaustion in 2024, restricting the creation of new units. With supply constrained, demand has pushed their market price above NAV.
Five of the six traded around 20 per cent above that value this week. The sixth, Nippon India ETF Hang Seng BeES, has slipped under 3 per cent. On October 6 last year, that fund closed at Rs 563.54 while its NAV was Rs 448.78, a gap of 25.6 per cent. Ten months on, its NAV has gained about 3 per cent while its price has fallen about 16 per cent. Rs 1 lakh put in that morning is worth about Rs 84,000 today, against about Rs 1,03,000 for money that simply tracked the NAV.
Its NAV did not fall. The premium did. The same premium risk exists across these ETFs. Nobody knows where a premium goes next, and a change in it can add to or subtract from your return whichever fund you hold. Check where it stands before you place an order.
Global ETFs: Where the premium stands
| Global ETF | NAV (Rs) | Price (Rs) | Premium now (%) | 52-wk avg premium (%) | 52-wk premium range (%) | 52-wk avg daily trading (Rs cr) |
|---|---|---|---|---|---|---|
| Motilal Oswal NASDAQ 100 | 272.59 | 326.00 | 19.6 | 10.4 | -3.0 to 27.7 | 23.36 |
| Mirae Asset Hang Seng TECH | 18.96 | 22.68 | 19.6 | 19.7 | 12.4 to 36.4 | 2.43 |
| Mirae Asset NYSE FANG+ | 172.61 | 205.29 | 18.9 | 19.7 | 11.8 to 30.1 | 5.59 |
| Mirae Asset S&P 500 Top 50 | 66.49 | 79.58 | 19.7 | 19.4 | 14.5 to 23.7 | 1.54 |
| Motilal Oswal Nasdaq Q50 | 121.98 | 146.42 | 20.0 | 14.2 | -1.7 to 26.4 | 1.42 |
| Nippon India ETF Hang Seng BeES | 463.33 | 475.86 | 2.7 | 14.7 | 2.4 to 25.6 | 8.42 |
| Data as of August 26, 2026. Premium is the price above NAV; a minus sign is a discount. NSE data. | ||||||
Which fund is open for new SIP registrations can change quickly, and ETF premiums can move even faster. But a fund being available is not, by itself, a reason to invest in it. Subscribe to Value Research Fund Advisor to see which international fund deserves a place in your portfolio.
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