The landscape of international investments via exchange-traded funds (ETFs) in India has become significantly more complex in recent years. Investors are encountering a range of unprecedented challenges when it comes to accessing global markets. Regulatory constraints, along with shifting market dynamics, have contributed to the development of a unique investment environment. As a result, overseas ETFs are now trading at substantial premiums, reflecting the growing demand and limited access to foreign markets, prompting many investors to reconsider their strategies and navigate the intricacies of cross-border investment in a highly restricted and competitive space.
The regulatory stranglehold: The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) have implemented guidelines that impact international investment opportunities. Mutual funds are restricted to investing only $7 billion in foreign equities and $1 billion in international ETFs.
The premium paradox: The most alarming aspect is the unprecedented premium at which these ETFs are trading for, ranging from 15% to 20% above their net asset value (NAV).
This story is from the December 25, 2024 edition of Mint Hyderabad.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the December 25, 2024 edition of Mint Hyderabad.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Kick off the new year with fresh games
Despite a typical slow pace, Jan 2025 features several new game releases
A flagship to challenge most top smartphones in 2025
The vivo X200 Pro may emerge as the camera phone to beat in 2025. What else does the flagship have going for it?
CES 2025: What Lies Ahead in Tech This Year
With more powerful computing chips, the idea of PCs compact enough to be carried around in one hand is becoming real
Most favoured interpretations can prove unfavourable
India's stance on Switzerland's MFN status in a Nestle tax dispute has had adverse consequences
Elon Musk and his critics are wrong about free speech on X
Both sides of this divide must read the US First Amendment again
Monetary policy should lead the easing cycle our economy needs
Weak demand in the economy needs a response but budget tightening would mean the central bank must look for easing space
Revision of the inflation gauge: Handle with care
India's consumer price index should be revised on the basis of the latest survey of household consumption expenditure, but with nuances of the country's situation kept well in mind
May 2025 spell climate hope after a super-warm 2024
Let's harness the negativity bias that humans are predisposed to for measures aimed at faster climate action
India Needs a Tad More Ambition and Resolve to Boost GDP Growth
We must focus on long-term fixes rather than near-term uncertainties for fast economic expansion
Insights on When to Step Back From the Stock Market
The stock surge since 2020 has made it harder to convince investors to step back if needed
