International mutual funds: Only 12 funds still accept fresh SIPs. See the list

International mutual funds have emerged among the better-performing mutual fund categories over the past year, helped by a rally in global equities and a weaker rupee. Yet, investors looking to add overseas exposure through mutual funds continue to face a significant hurdle since most international schemes remain closed to fresh investments.

More than four years after the mutual fund industry exhausted the regulatory limit for overseas investments, access to these funds remains restricted. According to Value Research, 54 of the 66 international mutual funds it tracks are currently not accepting fresh investments. Only 12 schemes continue to accept fresh systematic investment plans (SIPs), while just one remains open for fresh lump-sum investments.

More than four out of five international funds remain closed

The latest data shows how limited the investment universe has become for Indian investors seeking overseas diversification through mutual funds.

This means nearly 82% of international mutual fund schemes tracked by Value Research remain closed to fresh investments.

Unlike domestic equity or debt mutual funds, international schemes are subject to an industry-wide overseas investment limit. Once this ceiling was reached in 2022, fund houses began restricting fresh inflows to avoid breaching the limit.

Which international mutual funds are still open?

While the number of available schemes has shrunk significantly, investors are not limited to a single investment strategy. The funds that continue to accept fresh SIPs provide exposure to a range of global markets, including US equities, developed markets, technology-focused portfolios and international indices.

The table below lists the international mutual funds that currently accept fresh SIPs, along with their one-year returns and whether fresh lump-sum investments are also permitted.

A look at the performance data shows that returns among the remaining open schemes vary considerably. While some funds have delivered strong double-digit gains over the past year, others have posted relatively modest returns, reflecting differences in their geographic exposure, sector allocation and underlying investment strategies.

Why do the restrictions continue?

The restrictions trace back to February 2022, when the mutual fund industry exhausted the overall overseas investment limit of $7 billion for international mutual funds, while a separate $1 billion limit applies to investments in overseas exchange-traded funds (ETFs).

Since then, most fund houses have either suspended fresh subscriptions or imposed restrictions on new investments to manage the available overseas investment headroom. While some schemes have periodically reopened for limited inflows, the overall industry cap has remained unchanged, preventing a broader reopening of international funds.

As a result, Indian investors looking to diversify globally through domestic mutual funds continue to have far fewer choices than they did before the restrictions were introduced, despite renewed interest in overseas markets. Until regulators increase the overseas investment limit or additional headroom becomes available, the handful of schemes that continue to accept fresh SIPs are likely to remain among the few avenues for investors seeking global diversification through the mutual fund route.