It's recess time for international mutual funds

International mutual funds have been in the spotlight for the last two-three years. Their popularity derives from the growing realisation of international diversification benefits and the stupendous post-covid returns in markets such as the US. However, unlike their domestic counterparts, overseas funds do not have the luxury to expand as much as they want. There is a cap for the foreign remittance that Indian mutual funds are allowed to do, and it seems the industry is at the brink of exhausting this limit now. So, the Association of Mutual Funds in India (AMFI) came out with guidance on January 30, 2022, asking the AMCs not to make any incremental investments in overseas funds or securities beyond what is existing on February 01, 2022, at the respective mutual fund level to comply with the rules and SEBI's direction. The current scenario As per the Securities and Exchange Board of India (SEBI) rules, each