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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  1. Sanjay Singhaniya

    There is already FII route available for NRI. I guess FII includes foreign mutual fund. Why would NRI go through Indian mutual fund?

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