Domestic mutual fund industry’s foreign liabilities surged 19.9 per cent to $30.5 billion, in market value terms during financial year 2025, primarily driven by an increase in units issued to non-residents, a Reserve Bank of India survey showed.
Among major countries, non-residents of the United Arab Emirates (UAE) held the largest share in mutual fund (MF) units, both in terms of face value (21.2 per cent) as well as at market value (20.2 per cent) during fiscal 2025. In face value terms, foreign liabilities in units of MFs held by non-residents of UAE increased by 32.8 per cent to Rs 3,305 crore in FY25, while in market value terms, they rose by 28 per cent to Rs 11,508 crore.
The non-residents of other countries that own a large share of domestic MF units, in face value terms, include the United States of America (USA) – 11.2 per cent, the United Kingdom (UK) – 10.8, and Singapore – 6.6 per cent.
The survey showed that overseas assets of MFs declined by 5.6 per cent and stood at $8.3 billion in March 2025, due to lower holdings of foreign equity securities.
As a result, the net foreign liabilities of MFs increased to $22.2 billion in March 2025 from $16.6 billion a year ago.
The findings are based on the RBI’s survey of Foreign Liabilities and Assets of the Mutual Funds showed. The survey covered 45 Indian MFs and their Asset Management Companies (AMCs), which held or acquired foreign assets or liabilities during 2024-25 or in the preceding years.
It showed that over 95 per cent of the overseas equity investment of domestic mutual funds (MFs) were concentrated in the USA (64.4 per cent), Luxembourg (19.7 per cent), and Ireland (11 per cent).
Story continues below this ad
Foreign liabilities of AMCs increased by 16.8 per cent and stood at $7.5 billion in March 2025, on the back of higher inward direct investment. Residents in Japan, Canada and the UK together accounted for over 83 per cent of FDI (foreign direct investment) among Indian AMCs.
© The Indian Express Pvt Ltd
.