Invesco mutual fund: 3 international schemes resume existing SIPs from August 18, but new registrations remain shut
As restrictions on international mutual fund investments continue, Invesco Mutual Fund is reopening select existing SIP and STP transactions in three overseas fund-of-funds from 18 August. The move offers some relief to investors whose systematic investments in global funds have been disrupted by fund houses hitting their overseas investment limits.
The reopening applies to Invesco Global Equity Income Fund of Fund, Invesco Pan European Equity Fund of Fund and Invesco Global Consumer Trends Fund of Fund. However, it does not extend to new SIP registrations, lump-sum investments or switch-ins.
An analysis by Value Research shows that the number of international schemes where existing SIPs have been frozen has increased from 19 to 28 after PGIM and Edelweiss tightened restrictions. PGIM stopped its three international funds from 8 August, while Edelweiss shut six schemes from 12 August.
Why are international mutual funds being opened and closed?
Indian mutual funds face an industry-wide overseas investment ceiling, while individual fund houses also have limits on how much they can invest abroad. As an AMC approaches its available overseas investment capacity, it may have to stop accepting fresh money into international schemes.
The restriction can ease when investors redeem their units, freeing up some overseas investment capacity. This explains why one fund house can reopen selected existing SIPs even while another AMC is shutting its international schemes.
For investors, however, such a reopening may not last indefinitely. According to Value Research, Invesco has cautioned that the transactions could be suspended again if the fund house approaches its overseas investment limit.
So, an existing SIP becoming active again should not be interpreted as a permanent return to normal operations. Investors should check their AMC’s latest notice before assuming that fresh investments are available.
What should investors do if their international SIP is paused?
A paused SIP does not necessarily mean investors have to abandon their global allocation. It primarily means the fund house currently does not have enough room to accept additional overseas investments.
For investors whose international SIP has been suspended, there is therefore no need to assume that the investment opportunity has disappeared permanently. Invesco’s latest move shows that restrictions can be eased when overseas investment capacity becomes available.
At the same time, investors should not rush into an alternative fund simply because it remains open. International exposure should fit the overall asset allocation and investment horizon. The availability of a scheme can change as quickly as the AMC’s overseas investment headroom does.
