The capital market regulator said that individual mutual funds can now make up to $1 billion in overseas investments within the overall industry limit of $7 billion.
The regulator has also allowed individual mutual funds to make a maximum investment of $300 million in overseas exchange traded funds (ETFs) within the overall industry limit of $1 billion.
In November, Sebi had enhanced the overseas investment limit for individual mutual funds to $600 million from $300 million. The regulator had also increased the cap on investment in overseas ETFs to $200 million.
The capital market regulator said that the changes mentioned in its circular on Thursday will come into force with immediate effect.
Sebi’s relaxation comes in the backdrop of an increasing trend of domestic mutual funds investing in overseas markets especially the US to capture the runaway bull market in technology stocks.
Several MFs in the recent past have come out with new fund offers that provide investors an avenue to invest in the overseas markets without the hassle of direct participation.