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SBI Mutual Fund launches new scheme investing in US stocks

SBI Mutual Fund launches new scheme investing in US stocks

The minimum investment required is Rs 5,000. The expense ratio of the underlying fund as well as the feeder fund combined is capped at 2.25 per cent per annum under SEBI rules

SBI Mutual Fund has launched its first international fund offering that will invest in US stocks SBI Mutual Fund has launched its first international fund offering that will invest in US stocks

SBI Mutual Fund has launched its first international fund offering that will invest in US stocks. Although some of the domestic schemes of the SBI MF, such as SBI Focused Equity already invest some part of their portfolio in international stocks, this new scheme will feed into the Amundi Funds - US Pioneer Fund.

The Amundi Funds, which is based in Luxembourg, has delivered returns of 16.27 per cent (CAGR)  in euro terms, beating its benchmark S&P 500 Index return of 16.16% (as of 31st January 2021), Livemint reported. The underlying fund has a size of $2.5 billion.

The fund is targeted at high-net-worth investors, seasoned investors, young investors, and hedge funds, said DP Singh, Chief Business Officer, SBI Mutual Fund.

The minimum investment required is Rs 5,000. The expense ratio of the underlying fund as well as the feeder fund combined is capped at 2.25 per cent per annum under SEBI rules.

It must be noted that Rupee depreciation against the US dollar enhances the returns of international mutual funds. The SBI highlighted that Indian Rupee depreciated by 3.29 per cent against the US dollar on average annually (a rolling 3-year CAGR basis).

Further, the country's largest lender added that the IT sector holds the majority proportion of the underlying fund at a weight of 37.3 per cent, followed by consumer discretionary stocks at 15 per cent. Microsoft, Apple, Alphabet, Amazon, and Visa are the five largest holdings in the underlying fund (as of January 31).

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