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Mirae Asset Mutual Fund is set to launch outbound fund that will allow resident Indian investors to invest through Gift City.
So far, GIFT City has been mainly limited to inbound fund offerings, catering mainly to NRIs and foreign investors. Indian residents don’t have many opportunities to invest in global assets through GIFT City.
With the outbound structure, resident Indians will now have a regulated route to diversify their portfolios globally.
Vaibhav Shah, Head of Products, Business Strategy & International Business at Mirae Asset Investment Managers (India), explained that Indian investors are heavily invested in Indian equities, which has made them vulnerable during market corrections. He said that many investors saw negative returns in recent correction and a diversified portfolio including international assets could help generate better risk adjusted returns. Good investing principles recommend asset allocation across asset classes with low correlation. Moreover, themes like AI, semiconductors, electric vehicles, and blockchain are gaining global traction, and Indian investors have limited or no exposure to these sectors domestically. US markets, in particular, have shown strong returns, outperforming Indian markets by 5–6 percent in dollar terms over 15 years. Therefore, this fund helps mitigate risk, enables access to global themes, and supports diversified investing.
The timing to launch this fund is also important. The $7 billion overseas investment limit set for Indian mutual funds is already exhausted and the $1 billion ETF sub-limit is also nearly full. This makes Mirae’s outbound AIF product a timely and much-needed solution for investors seeking international exposure. Also, the current market correction is providing a good entry point for investors to access global markets and themes.
Vaibhav also highlighted the currency depreciation advantages and the tax efficiency of GIFT based AIFs. The AIFs in GIFT City attracts a tax of 12.5%, which is similar to other investments in the international assets. The primary advantage of GiFT City is access to global markets, which has become difficult due to mutual fund restrictions. Now, via GIFT City and the LRS route, Indian investors can invest globally through three ways: directly buying global stocks/ETFs, using offshore brokers, or investing through a fund through LRS route. The first two routes are complicated—high transaction costs, custody fees, taxation issues, currency conversion risks, and the challenge of choosing the right stocks or funds from thousands of options. In contrast, investing via a GIFT City AIF offers ease, lower complexity, and professional fund management that can dynamically shift allocations. It’s a much simpler and more efficient method for Indian investors to gain global exposure.
Mirae Asset Global Allocation Fund, will be a Category-III Alternative Investment Fund (AIF) under the IFSCA framework. It is a close-ended fund focused on investing in global ETFs, offering exposure to broad market indices and emerging global themes. The fund’s asset allocation is: 90–100 percent will be invested in global ETFs and offshore funds. The strategy consists of a core and tactical component. The core, comprising 50–70 percent of the portfolio, focuses on developed markets which is mainly the US, which accounts for 25 percent of global GDP, 65 percent of the MSCI World Index, and 50 percent of global market cap. The tactical allocation, 30–50 percent, will focus on emerging markets like China, Taiwan, and Brazil, and themes such as AI, semiconductors, and electric vehicles.
The fund is open for investment for resident and non-resident Indians (NRIs), foreign nationals and institutions, family offices and corporates. The minimum ticket size for this outbound fund is set at $ 151,000 while the limit for accredited investors is $ 10,000. The close end AIF fund will be open for subscription for around one year. It has a 3-year lockin period with the possibility of a 2-year extension.
