Mutual fund overseas assets fall 5.6% to $8.3 billion in FY25, says RBI

Indian mutual funds' overseas assets dropped 5.6 per cent to $ 8.3 billion in FY25, the Reserve Bank of India (RBI) said on Monday.

At the end of FY24, Indian mutual funds held assets of over $ 8.81 billion in foreign assets, as per the central bank's annual survey of foreign assets and liabilities of mutual funds.

"Overseas assets of MFs declined 5.6 per cent and stood at $ 8.3 billion in March 2025, due to lower holdings of foreign equity securities," the RBI said.

There was a 3.9 per cent drop in equity securities held abroad by MFs at market value in the US at ₹ 44,500 crore, while the same in Ireland and Taiwan also witnessed declines.

 

Over 95 per cent of the overseas equity investment of the MFs were concentrated in the US, Luxembourg, and Ireland, the RBI said.

It can be noted that FY25 witnessed volatilities in the global markets because of continuing geopolitical tensions amid tensions between Ukraine-Russia and in Israel, while change of guard in the US and the newer way of looking at trade policies by President Donald Trump also led to some nervousness among investors.

The flows into MFs' equity schemes surged nearly 25 per cent to ₹ 29.45 lakh crore in FY25, indicating stronger preference among investors to punt on the domestic markets.

The RBI survey revealed that the foreign liabilities of MFs increased 19.9 per cent in FY25 to $ 30.5 billion at market value, due to the rise in units issued to non-residents.

People in the UAE were the biggest holders in Indian MFs' schemes at ₹52,549 crore, while Australia had the highest growth at over 40 per cent in the liabilities of domestic MFs.

Non-residents of the United Arab Emirates (UAE), the United States of America (USA), the United Kingdom (UK), and Singapore held the largest share in MF units, both in terms of face value as well as at market value, the RBI said.

Foreign liabilities of asset management companies increased 16.8 per cent to $ 7.5 billion in March 2025, on the back of higher inward direct investments, while the overseas assets of AMCs increased marginally from their previous year's level and were largely held in Guernsey, Singapore, and Mauritius.