India-dedicated funds saw outflows of USD 709 mn in May

Mumbai, Jun 25 India-dedicated funds saw outflows of USD 709 mn, led by non-ETF outflows of USD640 mn while GEM funds saw inflows of USD 874 mn in the month of May, led by non-ETF inflows of USD 602 mn.

Overall listed funds saw inflows of USD 256 mn, driven by ETF inflows of USD 304 mn, which were offset by USD 49 mn of non-ETF outflows, says a report by Kotak Institutional Equities (KIE).

Listed emerging market fund flows were positive for almost all countries. China, Taiwan and South Korea witnessed USD 6.4 bn, USD 3.6 bn and USD 3.1 bn. Total FPI activity and EPFR activity showed similar trends for India and Indonesia.

Allocations to China and India constitute 49 per cent of the average Asia ex-Japan fund portfolio. Allocations to India by Asia ex-Japan funds increased to 13.5 per cent in May from 12.7 per cent in April while allocations to India by GEM funds increased to 10.9 per cent in May from 10.2 per cent in April. Allocations by Asia ex-Japan non-ETFs to India increased to 14.2 per cent in May from 13.5 per cent in April, while allocations to India by GEM non-ETFs increased to 10.6 per cent in May from 10 per cent in April.

KIE's foreign fund-flow tracker gives a comprehensive view of the market flow by listed funds into India and its emerging market (EM) peers. These market participants are further classified based on their investment styles [passive (ETFs) or active (non-ETFs)] in an attempt to understand the intent and sentiments governing the flow. Please note there is a difference between EPFR-reported fund flows and FPI flows reported by NSDL. EPFR fund-flow data primarily tracks mutual funds, ETFs, closed-end funds and variable annuity funds/insurance-linked funds, whereas FPI flows reported by NSDL also capture investments from hedge funds, proprietary desks and sovereign wealth funds.