Ashu Suyash (left), country head, Fidelity Fund Management, with Fidelity International director Jed Wrigley in Mumbai on Monday. (Fotocorp)

Mumbai, April 9: Fidelity has become the third player in India to offer investors an opportunity to invest in overseas markets.

Fidelity has come out with its international opportunities fund, which will invest 35 per cent of its corpus in markets in Asia Pacific that are offering higher returns than the sensex right now.

The fund will come out with more offerings as soon as Sebi comes out with new investment guidelines.

The government last year increased the investment limit for mutual funds in overseas stocks to $2 billion, with select fund houses permitted to invest around $1 billion more in exchange traded funds abroad.

Retail investors are allowed to invest $50,000 in a year in stocks listed on foreign stock exchanges, up from $25,000.

The equity-oriented fund will be open-ended, the minimum lump sum investment being Rs 5,000 and multiples of Rs 1000 for additional applications thereafter.

The investment will go through an entry load of 2.25 per cent for each purchase less than Rs 5 crore.

There is an exit load of 1 per cent for redemptions within the first six months. The new fund offer (NFO) will be open from April 9 to April 30.

The fund will also have a systematic investment plan (SIP) option during the NFO period. In this option, there is a minimum of six instalments of Rs 500 each. The entry and exit loads are the same as for lump sum investments.

“Indian investors have been losing opportunities in the past and could not take advantage of growing international markets. For example, the Tata-Corus deal had sent the share price of Corus soaring by almost 200 pence, while the Tata scrips witnessed a steep fall shortly after the deal. An international fund, if present then, could have taken advantage of the rise in the Corus stock and give excellent returns to its investors,” said Jed Wrigley, director of Fidelity International, on the advantages that the fund can bring to the Indian investor.

Fidelity is bullish on Asian stocks, particularly in Japan and the Asia Pacific region. The entire corpus of overseas investments out of this fund will be done only on leading Asian stocks.

“Diversification reduces risk and brings more consistent returns. In the past year, most of the Asian MSCI indices, including that of India’s, have outperformed the world’s MSCI index. India accounts for only half a per cent of the world’s market capitalisation and Indian investors would be denying themselves a great opportunity by not looking at other markets. Fidelity International Opportunities Fund has been brought to India with this sole aim,” Wrigley added.

Principal’s PGIF Emerging Market Equity Fund and Franklin Templeton’s Templeton India Equity Income Fund are two other such funds. PGIF Emerging Market Equity Fund, which was launched in March 2004, has net assets of about Rs 436.70 crore. It posted a return of 15.24 per cent last year.

Templeton India Equity Income Fund, which was launched in April 2006, has given a 18.25 per cent return till date and has net assets of about Rs 1,700 crore. Almost 100 per cent of PGIF’s investments flow to emerging overseas markets, whereas in case of Templeton and Fidelity, the investment in overseas equities are almost 20 per cent and 35 per cent, respectively.

Ashu Suyash, managing director and country head, Fidelity Fund Management Private Ltd, said the fund house is planning to increase the present limit of overseas investments and may also offer other global products in the country.