SBI MF to launch overseas FoF

Our Bureau Mumbai | Updated on February 26, 2021

SBI Mutual Fund will launch its first international fund offering on Monday. The country’s largest fund house will float the new fund offer of SBI International Access - US Equity FOF.

The fund of fund will invest in its joint venture partner Amundi Funds’ US Pioneer Fund (domiciled in Luxembourg), which invests predominantly in US market securities.

Launched in 1928, the Amundi Funds US Pioneer Fund has AUM of $2.5 billion. SBI International Access FoF may also invest in other mutual funds/ ETFs domiciled overseas and invest predominantly in US markets. The scheme will be benchmarked to the S&P 500 Index after converting it to Indian Rupee.

DP Singh, Chief Business Officer, SBI Mutual Fund, said the fund is targeted at seasoned investors, high networth investors and hedge funds besides young investors for market diversification.

It will be predominately distributed through Indian and foreign banks to focus on a target audience, he said. The minimum investment required is ₹5,000.

The scheme’s investment objective is to invest mainly in a broad range of equities of companies that are based in or do most of their business in the US and may invest up to 20 per cent of its assets in securities of non-US companies. The scheme’s investment will include sustainability profile compared to the benchmark index by integrating ESG factors.

The advantages of investing outside India includes international diversification, lower correlation and currency depreciation.

Published on February 26, 2021

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