Indian Mutual Funds Overseas Assets Drop 5.6% to $8.3 Billion in FY25: RBI

Indian mutual funds’ overseas assets declined by 5.6% in FY25, standing at $8.3 billion compared with $8.81 billion at the end of FY24, according to the Reserve Bank of India report. The fall was mainly on account of lower holdings of foreign equity securities.

Equity Investments Abroad

The value of equity securities held by mutual funds in foreign markets dropped 3.9% in FY25. In the United States, holdings stood at around ₹44,500 crore, while exposures in Ireland and Taiwan also recorded declines. More than 95% of overseas investments were concentrated in the US, Luxembourg, and Ireland.

Global Market Conditions

As per the report, the period was marked by volatility in global markets. Factors included the ongoing conflict between Ukraine and Russia, unrest in Israel, and policy changes in the US under President Donald Trump. These developments contributed to fluctuations in overseas portfolios.

Domestic Market Preference

At the same time, flows into Indian mutual fund equity schemes rose strongly. In FY25, total assets in equity schemes increased by 25% to ₹29.45 lakh crore, pointing to higher allocations toward domestic markets during the year.

Read more: SBI, ICICI Prudential and HDFC Mutual Funds Lead the Mutual Fund Industry in Debt Assets!

Foreign Liabilities of Mutual Funds

The RBI survey also showed an increase in the liabilities of mutual funds. Foreign liabilities rose 19.9% to $30.5 billion in FY25, supported by higher issuance of units to non-residents. Investors from the UAE were the largest holders, with investments worth ₹52,549 crore. Australia registered the highest growth, with liabilities expanding by more than 40%.

For asset management companies, foreign liabilities stood at $7.5 billion in March 2025, an increase of 16.8% from the previous year, driven by inward direct investments. Overseas assets of AMCs showed only a marginal rise, with major exposure in Guernsey, Singapore, and Mauritius.

Conclusion

The RBI survey highlights that while overseas assets of mutual funds contracted in FY25, liabilities to foreign investors and domestic equity inflows expanded during the year.

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