NRIs are spread across the world from the Middle East to the UK and the USA. There are about 3.25 lakh NRIs living in the United Kingdom. Once they begin earning a decent income, Indians living abroad explore investment options for NRIs in India. Mutual funds are a great option to earn higher income as compared to traditional investment options. There are some important guidelines and rules that need to be followed to invest in mutual funds in India for NRIs. UK-based NRIs are also required to adhere to rules set by the Foreign Exchange Management Act (FEMA) to invest in NRI mutual funds.
Also Read: NRI Mutual Fund: The Basic 2022 Guide
Best mutual funds for NRIs from UK
Here are some of the mutual fund investment options for NRIs based in the UK:
- ICICI Prudential Mutual Funds
- Aditya Birla Sun Life Mutual Funds
- L&T Emerging Business Fund
- Nippon Indian Mutual Funds
- DSP Mutual Funds
- PGIM Mutual Funds
- SBI NRI Mutual Funds
- Kotak Mutual Funds
- HDF Mutual Funds
For any NRI mutual fund related queries, you can get in touch with NRI wealth managers right away.
Each of the fund houses sets different NRI mutual fund investment conditions to accept investment from NRIs. While some of the mutual fund houses accept investment only in paper application forms, a few of them accept online applications through NSE NMFII or BSE STARMF platforms.
NRIs living in the UK can download SBNRI App to choose from 3000+ mutual fund schemes in India or to ask any questions related to mutual fund investment.
SBNRI is an authorised Mutual Fund Distributor platform & registered with Association of Mutual Funds in India (AMFI). ARN No. 246671
Also Read: Mutual Funds for NRIs from USA/Canada to Invest in India
Best performing mutual funds for NRIs from UK
The following table shows the list of best performing mutual funds for UK-based NRIs, based on years’ returns:
| Funds | 3 Mo | 6 Mo | 1Yr | 3 Yr | 5 Yr | 2022 |
|---|---|---|---|---|---|---|
| PGIM India Midcap Opportunities Fund | -5.8 | -5.8 | 8.5 | 31.5 | 17.2 | -1.7 |
| Nippon India Small Cap Fund | -2.8 | 2.1 | 18.4 | 34.7 | 15.6 | 6.5 |
| Kotak Small Cap Fund | -2.6 | -3.8 | 6.3 | 29.8 | 15.6 | -3.1 |
| DSP BlackRock Natural Resources and New Energy Fund Growth | 0 | 9.6 | 5 | 29.8 | 10.2 | 9.8 |
| L&T Emerging Businesses Fund Growth | -1.6 | 1 | 13.7 | 30.9 | 11.8 | 1 |
| Aditya Birla Sun Life Digital India Fund | -1.9 | 6.8 | -6.6 | 29.6 | 21 | -21.6 |
| SBI Contra Fund | -1.7 | 4.3 | 22.2 | 33.9 | 14.8 | 12.8 |
| ICICI Prudential Infrastructure Fund | 0.3 | 10 | 29.9 | 32.5 | 14.1 | 28.8 |
| ICICI Prudential Technology Fund | -3 | 4.6 | -10.2 | 33.6 | 21.8 | -23.2 |
| HDFC Small Cap Fund | 0.5 | 7 | 19.2 | 30.9 | 12.7 | 4.6 |
Note: Returns up to 1 year are on an absolute basis & more than 1 year are on CAGR basis as on 6 March 2023.
Mutual fund investment rules for NRIs
Mutual funds, exchange-traded funds (ETFs), stocks, etc. are some of the investment options for NRIs in India. To invest in any of the financial instruments, NRIs need to follow investment regulations set under the Foreign Exchange Management Act 1999 (FEMA). Whereby investment into the capital market in India is allowed only in compliance with the conditions like the opening of rupee-denominated NRI account, KYC documentation, etc. as described below:
- KYC for NRIs: NRIs need to complete the KYC process to invest in mutual funds in India, by submitting required documents. Some AMCs require in-person verification.
- FIRC (Remittance Certificate): If you invest in funds via a cheque or demand draft, you must attach a foreign inward remittance certificate (FIRC). Alternatively, a letter from the bank would be considered, which confirms the source of funds.
- Redemption: The fund house will credit returns (investment + gains) you get when you redeem your fund units to your account after debiting applicable taxes (if any). You can also get the payment via cheque. Some banks allow the redemption of proceeds to be directly credited to the NRO/NRE account. If you have opted for non-repatriable investment, the amount will be credited only to an NRO account.
KYC procedure for NRIs to invest in India
UK NRIs need to complete certain formalities to successfully complete their KYC procedure:
- KYC form: KYC form needs to be submitted along with the necessary details filled to the SEBI registered intermediate.
- Documents: Here are the documents needed for KYC procedure:
- Overseas address proof
- Indian address proof
- A photocopy of passport
- A recent photograph
If the NRI is in the Merchant Navy, he must submit a mariner’s declaration or certified copy of the Continuous Discharge Certificate.
- Attestation: These documents need to be attested by any of the following entities – the authorized officials of overseas branches of scheduled commercial banks registered in India, court magistrate/ judge, public notary, or the Indian Embassy/ Consulate General in the country of your residence.
- IPV (In-Person verification): IPV is mandatory for investment in mutual funds for Non-Resident Indians. The in-person verification can be done through video conferencing with the official representatives of the mutual fund house.
Also Read: How NRI invest in India: Mutual Funds and Real Estate
Mutual funds for NRIs in UK: Investment procedure
- Direct/ self-investment: NRIs can directly make investments in funds in India through their NRI (NRE/NRO) account. KYC forms are available on the websites of mutual fund houses. Alternatively, NRIs can visit the Indian Embassy in the UK to complete in-person verification.
- Power of Attorney (POA): You can also appoint a Power of Attorney to invest in mutual funds on your behalf in India. Ensure that your POA is KYC compliant. Signatures of both applicants should be on the KYC documents that you submit to the respective AMC.
SBNRI is an authorised Mutual Fund Distributor platform & registered with Association of Mutual Funds in India (AMFI). ARN No. 246671
Before investing in Indian market, NRIs must consult market experts to make informed decisions. You can get detailed mutual fund advisory from experts at SBNRI. You can download SBNRI App from the Google Play Store or App Store to ask any questions related to mutual fund investment, NRI account opening online and tax filing in India. To ask any questions related to Mutual Funds, click on the button below. Also visit our blog and YouTube channel for more details.
FAQs
The common doubt in the minds of NRIs is whether they can invest in mutual funds in India? The answer is yes, NRIs are allowed to invest in mutual funds in India. They need to meet certain requirements as per the guidelines of FEMA for being an NRI for investing in NRI mutual funds.
The best mutual funds depend on your investment goals and risk tolerance. Here are some of the best mutual fund options for NRIs:
– ICICI Prudential Mutual Fund
– SBI Mutual Fund
– Sundaram Mutual Fund
– UTI Mutual Fund
– Aditya Birla Sun Life Mutual Funds
– Tata Mutual Funds
To invest in mutual funds in India, NRIs need to open any of the following NRI accounts with an Indian bank:
– NRE account
– NRO account
– FCNR account
Here are some of the mutual fund investment options for NRIs based in the UK:
– ICICI Prudential Mutual Funds for NRIs
– Aditya Birla Sun Life Mutual Funds for NRIs
– Tata Mutual Funds for NRIs
– Nippon Indian Mutual Funds for NRIs
– UTI Mutual Funds for NRIs
– PGIM Mutual Funds for NRIs
– SBI Mutual Funds for NRIs
– Franklin India Mutual Funds
