Mutual Funds for US-Canada NRIs

Mutual Funds for US-Canada Based NRIs
Mutual Funds for US-Canada Based NRIs

Mutual funds for US-Canada NRIs are very few and existing funds have stopped accepting fresh investments.

If you are an NRI/PIO based out of these two countries, investing  in India can be quite problematic.

Most of the Mutual funds in India do not accept investments from aforementioned countries.

Since FATCA (Foreign Account Tax Compliance Act) makes it mandatory  for Financial Institutions to report to US Govt. complete  details of all transactions involving  ‘US persons’, most of the funds have stopped accepting investments from NRIs based out of these countries.

This is a really bad news for NRIs based out of US/Canada.

As a result of this NRI investment in India from these countries has fallen significantly.

However, there are still a few mutual fund schemes that accept investments.

Funds accepting Investments from US/Canada based NRIs

  • L&T Mutual Fund
  • SBI Mutual Fund

Exchange Traded Funds

ETFs are very similar to mutual funds except that ETFs are not actively managed investments.

ETF does not have a fund manager who actively decides sector/security exposure.

The performance of these ETFs has not been as great as a mutual funds.

Feeder Funds

There are various funds in the US /Canada that are investing in Indian companies.

Since these are actively managed funds, they usually deliver higher return than the benchmark/index.

Investing in Others’ Names

A US/Canada  based NRI/PIO may also  invest in India in his/her parents’ name.

This is a legal way of investing but should be used only for a short term .

You can sell the fund later  and proceeds  can be credited into your account.

Investing via Firms registered with SEC:

NRIs/PIOs can also invest via firms registered and compliant with SEC.

Recommended read: http://www.oracleinvestor.com/mutual-funds/mutual-funds-for-beginners/

I shall keep updating this post !

Cheers!

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