Motilal Oswal Asset Management Company has suspended lump sum investments and switch in of money into its S&P 500 Index Fund, Nasdaq Fund of Funds (FoF) and Motilal Oswal EAFE Top 100 Select Index Fund. The AMC has taken this action on account of the SEBI limit of USD 1 billion of investment in foreign stocks. According to a person with knowledge of the matter who declined to be named, the AMC is close to the Sebi limit but has some leeway left. Hence existing and fresh SIPs have not been stopped. The stoppage will go into effect on 17th January 2021. According to the aforesaid person, the stoppage is likely to be temporary and the regulator is likely to hike the limit soon.
In November 2020, Sebi raised the foreign investment limit per fund house from 300 million USD to 600 million USD and in June 2021, the regulator further upped this limit to USD 1 billion per fund house. However Motilal Oswal AMC has hit this revised limit in just 6 months of the regulator raising it for the industry. Mint had reported in November 2021, that the fund house had approached Sebi to raise the foreign investment limit.
Mutual Fund investors have ploughed significant amounts of money into international funds in recent years. The AUM of fund-of-funds investing overseas which captures part of this investment has grown from ₹1,764 crores in October 2018 to ₹23,013 crore in October 2021, a 13 times jump in 3 years. Motilal Oswal NASDAQ ETF has delivered a CAGR of ₹24.85% since it was launched in March 2011. Motilal Oswal Nasdaq 100 FoF feeds into the Nasdaq ETF. Motilal Oswal S&P 500 Index Fund was launched in April 2020. It has delivered 30.62% since launch. The two funds have assets under management of ₹6,273 crore and ₹2,737 crore respectively. Motilal Oswal MSCI EAFE Top 100 Select Index Fund was launched in December 2021. It focuses on developed markets outside the USA.
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