Motilal Oswal Asset Management Co. Ltd. on Tuesday said it has consolidated its S&P 500 Index Fund, MSCI EAFE Top 100 Select Index Fund and MSCI EAFE Top 100 Select Index Fund. Existing investments in Nasdaq 100 Fund including Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP) have been temporarily stopped with effect from April 1, 2022.
The Asset Management Company has taken this decision due to the limitation on foreign investment risk as per the industry.
Motilal Oswal MF in a circular said “It may be noted that any existing registered SIP/STP received in the above designed schemes after the cut-off time of March 31, 2022 will not be accepted and processed; However, the existing registered SIP/STP will remain active in the system. The increase in the limit in this regard will be further reactivated after receiving information from the regulators.
The fund house also mentioned that these restrictions on redemption, switch-out systematic withdrawal and transfer are not applicable under the above schemes.
Earlier, the fund house had stopped lump sum investments and new SIPs and STPs in these three schemes through separate circulars in January and February.
Motilal Oswal S&P 500 Index Fund and Motilal Oswal Nasdaq 100 FOF are among the largest foreign funds in India with assets under management of Rs 2,631 crore and Rs 3,986 crore, respectively, as on February 28, 2022. Motilal Oswal Nasdaq 100 Fund is a new scheme with an asset size of Rs 41 crore.
The Securities and Exchange Board of India (Sebi) in January advised mutual funds investing in foreign securities to stop further investment in foreign stocks to avoid breaching industry-wide foreign limits.
According to a Sebi circular dated June 3, 2021, mutual funds can make foreign investments of up to $1 billion in each mutual fund, with a total industry limit of $7 billion. However, the suspension is likely to be temporary and may be revoked once the limits are increased by the regulator.