The increase was led by investments in the US, which accounted for 63.5 percent of mutual funds’ overseas equity holdings.
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Foreign direct investment in AMCs rose 31.1 percent to Rs 56,201 crore in March 2026 from Rs 42,874 crore a year earlier.
- Indian MFs’ overseas assets rose 24% to $10.2B by March 2026.
- Foreign equity holdings increased 37.5%, led by US investments.
- Net foreign liabilities declined to $21.3B in March 2026.
Indian mutual funds increased their overseas exposure sharply in 2025-26, with foreign assets rising nearly 24 percent to $10.2 billion by the end of March 2026, driven largely by higher investments in foreign equity securities, according to the Reserve Bank of India’s annual Survey of Foreign Liabilities and Assets of Mutual Funds.
The survey, which covered 53 mutual funds and their asset management companies, showed that overseas equity holdings rose 37.5 percent year-on-year to Rs 93,602 crore in March 2026 from Rs 68,072 crore a year earlier.
The increase was led by investments in the US, which accounted for 63.5 percent of mutual funds’ overseas equity holdings. Holdings of US equities rose 36.5 percent to Rs 59,403 crore. Luxembourg and Ireland were the next largest destinations, accounting for 20.2 percent and 10.7 percent, respectively.
MFs also increased their exposure to Canada and mainland China, with equity holdings in the two markets rising 416.3 percent and 52.2 percent, respectively, although from a much smaller base.
Foreign liabilities also rise
While overseas assets grew faster, mutual funds’ foreign liabilities increased 3.3 percent to $31.5 billion, or Rs 2.98 lakh crore, at the end of March 2026. The rise was primarily due to an increase in the market value of mutual fund units held by non-residents.
The market value of units held by non-residents increased 14.2 percent to Rs 2.98 lakh crore from Rs 2.61 lakh crore a year earlier. At face value, such holdings rose 16.4 percent to Rs 73,471 crore.
The UAE was the largest source of non-resident holdings, accounting for 20.6 percent of the total at market value, followed by the US at 11.9 percent, the UK at 9.7 percent and Singapore at 7.2 percent. Together, the four accounted for nearly half of mutual funds’ units held by non-residents.
As overseas assets grew faster than foreign liabilities, mutual funds’ net foreign liabilities declined to $21.3 billion in March 2026 from $22.3 billion a year earlier.
Foreign ownership of AMCs rises
Foreign participation in Indian asset management companies also increased during the year. Foreign liabilities of AMCs rose 18.1 percent to $8.7 billion, primarily due to higher direct and portfolio investment.
Foreign direct investment in AMCs rose 31.1 percent to Rs 56,201 crore in March 2026 from Rs 42,874 crore a year earlier.
Japan accounted for nearly two-thirds of the FDI in Indian AMCs, with investments of Rs 36,920 crore, up 38.5 percent from the previous year. Canada was the second-largest source, with Rs 7,592 crore, accounting for 13.5 percent of total FDI.
Together, Japan and Canada accounted for about 80 percent of foreign direct investment in Indian AMCs.
On the other hand, overseas direct investment by Indian AMCs declined marginally to Rs 907 crore from Rs 935 crore. Guernsey accounted for 75 percent of these investments, followed by Singapore with 22.4 percent.