USD Funds in GIFT IFSC

USD equity funds in GIFT typically focus on US equities (S&P 500, Nasdaq 100), global equities (MSCI World), or thematic strategies (Global Tech, Global ESG). Operational structure: IFSC AMC subsidiary holds the underlying portfolio; daily NAV published in USD. Subscriptions accepted T+1 to T+3 depending on scheme. Redemptions process in USD; investors can repatriate to India (converting to INR at then-prevailing rate, with capital gains tax applying) or retain USD in the IFSC account for future deployment. USD bond/fixed-income funds invest in global investment-grade or high-yield bonds, USD-denominated emerging market debt, or short-duration money market. Target yields: 3-5% for IG bonds, 5-7% for high-yield, 4-6% for short-duration money market — reflecting US/global yield environment. Hybrid USD funds combine equity and debt with target asset mix similar to balanced advantage or aggressive hybrid mutual funds in INR. Subscription and redemption operate similarly to onshore funds — but in USD. Expense ratios are typically 0.6-1.2% for equity funds and 0.4-0.8% for debt funds — generally competitive with international FoF expense ratios for Indian retail investors. Tax treatment of USD fund redemptions for resident Indians: gains are foreign-source capital gains, classified per CBDT rules. Long-term gains (typically over 24 months for non-equity-classified) attract slab-rate tax post-FY24. Investors should not assume "tax-free" — the GIFT advantage is partial and product-specific.