HSBC Reopens Funds for SIPs; Baroda BNP Paribas Aqua Closes

Indian investors looking at global funds just saw some action. HSBC reopened three of its international funds for new Systematic Investment Plans (SIPs), which are regular fixed investments, and lump sum investments, a one-time large amount.

This move, effective August 18, allows investments up to Rs 2 lakh per month. Meanwhile, Baroda BNP Paribas Aqua, which had just reopened, closed on August 19, showing how quickly access to these international options can change.

Key Investment Numbers

• Rs 2 lakh: Monthly limit for new HSBC SIPs and lump sums.
• August 18: Date HSBC funds reopened and Invesco restarted installments.
• August 19: Date Baroda BNP Paribas Aqua closed to new registrations.
• 28 to 25: Reduction in total frozen schemes after Invesco’s restart.

Don’t Chase High Returns

Before jumping in, investors need to be careful. The article warns against making choices based only on high one-year returns, like the 54 percent seen in one of the reopened funds.

Such big short-term gains often mean the market has already surged. Instead, focus on the fund’s risk and if it fits your current investment mix.

Invesco Restarts, Regulatory Caps Remain

Some relief came for existing SIPs too. Invesco restarted installments in three of its funds on August 18. This reduced the number of frozen schemes from 28 to 25.

These ups and downs happen because India has a regulatory cap on how much its funds can invest overseas. When investors sell, new opportunities open up, but limits are quickly hit when holdings grow.

• HSBC Funds Reopened: HSBC Global Emerging Markets, HSBC Asia Pacific (ex-Japan) Dividend Yield, and HSBC Brazil.
• Invesco Funds Restarted: Invesco India Pan European Equity, Invesco India Global Equity Income, and Invesco India Global Consumer Trends.

Global ETFs and Premiums

Global Exchange Traded Funds (ETFs), which are funds traded like stocks, also pose a challenge. Many trade at a premium, meaning their market price is above their Net Asset Value (NAV), the fund’s per-share value.

This premium is still high across most global ETFs, with Nasdaq funds trading at more than double their usual premium. Nippon India Hang Seng BeES is a rare exception, trading at a much lower premium.

Ultimately, for international SIPs, the main things to consider are how well the investment fits your portfolio and its risk level, not just if a fund is available or its past performance.