Edelweiss Mutual Fund Caps Subscriptions in Overseas Schemes

Edelweiss Mutual Fund has placed investment restrictions on seven of its schemes that invest in global markets. The new limit will be effective from February 27, 2025, capping daily investments at ₹1 lakh per PAN for lumpsum, switch-in, SIP (Systematic Investment Plan), and STP (Systematic Transfer Plan) transactions.

Reason for Subscription Limits

The fund house cited that these schemes are nearing the headroom available under the RBI-imposed overseas investment limit. In February 2022, SEBI temporarily stopped mutual funds from investing in foreign stocks to ensure compliance with the $7 billion cap set by the Reserve Bank of India (RBI). A separate $1 billion limit per fund house was also introduced for foreign investments, including ETFs.

While SEBI later allowed mutual funds to resume foreign investments, they must still remain within the overall limit. As a result, some fund houses have periodically adjusted or capped subscriptions in global schemes.

Funds Affected by the Cap

The following seven funds will be subject to the ₹1 lakh per day limit:

• Edelweiss ASEAN Equity Off-shore Fund
• Edelweiss Greater China Equity Off-shore Fund
• Edelweiss US Technology Equity Fund of Fund
• Edelweiss Emerging Markets Opportunities Equity Offshore Fund
• Edelweiss Europe Dynamic Equity Offshore Fund
• Edelweiss US Value Equity Off-shore Fund
• Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund

Among these, 6 funds primarily invest in foreign equities, while the MSCI India Domestic & World Healthcare 45 Index Fund includes both Indian and US stocks.

Existing Transactions Remain Unaffected

Edelweiss Mutual Fund clarified that SIPs, STPs, and systematic transactions registered before February 27 will continue without restrictions. Transactions executed before February 25, 2025, before the cut-off time, will not be subject to the new cap.

Performance of International Funds

According to reports, different international fund categories have shown varied performance:

• China equity funds have delivered an average 55.38% return in the last year (as of February 21, 2025).
• US-based funds, including Nasdaq 100, S&P 500, and NYSE FANG ETFs, have gained 26% on average in the past year.
• Global equity funds have returned 17.48% in the same period.

Investors looking to increase their exposure to these schemes will now have to operate within the daily investment limit of ₹1 lakh per PAN.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.