28 international funds stop existing SIPs amid overseas investment limits; Edelweiss' Radhika Gupta says ‘no choice’

If you are doing a SIP in international funds, you should be aware of this. There are now a total of 28 international mutual fund schemes that have stopped accepting existing SIP instalments, according to Value Research data reported on 7 August.

The latest moves highlight how regulatory limits on foreign investments are increasingly affecting Indian investors seeking global diversification.

PGIM India has stopped existing SIPs in three international schemes from 8 August, while Edelweiss will stop SIPs in six schemes from 12 August.

Which international fund SIPs have been stopped?

The schemes affected by the latest announcements are:

PGIM India Mutual Fund

• PGIM India Global Equity Opportunities Fund
• PGIM India Emerging Markets Equity Fund
• PGIM India Global Select Real Estate Securities Fund

Edelweiss Mutual Fund

• Edelweiss ASEAN Equity Offshore Fund
• Edelweiss Greater China Equity Offshore 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 Offshore Fund

For investors already running SIPs in these schemes, the change does not mean their existing investments are being withdrawn. Units accumulated so far will remain invested. Investors can continue to hold them, redeem their units, or switch to another scheme.

The restriction applies only to future SIP instalments. This means you can no longer continue the SIP investments you are currently making.

How many international schemes had already stopped SIPs?

PGIM India and Edelweiss are not the first fund houses to take such action. According to Value Research data, 19 other international schemes had already stopped accepting existing SIPs.

These include schemes from fund houses such as Invesco, Motilal Oswal, Axis Mutual Fund, Kotak Mutual Fund, HDFC Mutual Fund and Mirae Asset Mutual Fund.

With the latest 9 schemes added, the total number of international schemes where existing SIPs have been stopped has risen to 28. However, around 40 international schemes are still running existing SIPs.

The availability of new SIP registrations is even more limited. At present, Baroda BNP Paribas Aqua FoF is the only international fund still accepting fresh SIP registrations.

What did Radhika Gupta say about the SIP pause?

Radhika Gupta, MD & CEO of Edelweiss Mutual Fund, mentioned in a post on X that the decision to close existing SIPs was not one the fund house was happy to take, but it had “no choice” because of the prevailing RBI limits on overseas investments.

Gupta clarified that “Edelweiss has only paused SIPs and not cancelled them”, and assured investors that they would restart if the limits are opened up.

Why are AMCs restricting international fund investments?

There are two important restrictions:

1. Industry-wide overseas investment limit

Indian mutual funds collectively have a regulatory ceiling of about $7 billion for overseas investments. This limit has remained unchanged since early 2022.

As international markets and existing overseas investments grow, fund houses have less room to deploy additional money abroad. Once the industry-level limit is reached, AMCs cannot freely increase overseas investments even if investors continue to demand international funds.

2. Individual AMC limit

Each fund house also has a separate overseas investment ceiling of about $1 billion. This means an AMC can run out of its permitted overseas investment capacity even if some headroom remains at the industry level.

As a result, restrictions can affect several schemes from the same fund house at once.

Disclaimer: This is purely for educational/ informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.