So now the mutual fund industry can sell its units abroad…and the limit is US $ 10 billion. Fairly obviously the media is excited (they need to do ONE story a day you see).
3 Journos tracking the industry wanted to know ‘what impact will the inflow of US $ 10 billion have on the equity market’.
I actually have no answer. None at all!
Let us look at some facts on the ground:
– upper limit does not mean that much money will come. Not sure if it will come at all.
– with zero sales charge, very unlikely that there will be great sales efforts
– Indian banks which largely deal with NRIs can now sell to the relatives, etc. of NRIs who have Green Cards
– Americans are anyway worried about too many other things – will they invest at all that is the question
-Foreign fund houses may not mind doing some sales – to its clients who are already in their other schemes. Players like Fidelity who have a large bouquet of offerrings will include the Indian schemes also
– Not sure how much money will come in, but the gut feeling is it will not worry the upper limit of the SEBI limit!
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