Considerable rise in fund flow activities in India

Mumbai: The month of September saw listed funds inflows of $362 million, dominated by ETF inflows of $295 million.

India-dedicated funds saw inflows of $172 million led by non-ETF (exchange traded fund) inflows of $167 million, while GEM (global emerging market) funds saw inflows of $118 million led by $251 million of ETF inflows which was offset by $133 million of non-ETF outflows.

According to an analysis by Kotak Institutional Equities, listed emerging market fund flows were mixed for all countries. China witnessed $10.8 billion of inflows, followed by Brazil and India, which saw $587 million and $362 million of inflows. Taiwan and Thailand saw outflows of $516 million and $207 million.

Total FPI (foreign portfolio investment) inactivity and EPFR (Emerging Portfolio Fund Research) activity showed similar trends for India and Taiwan, the brokerage said.

Allocations to China and India constitute 47 per cent of the average Asia ex-Japan fund portfolio. Allocations to India by Asia ex-Japan funds increased to 16.3 per cent in September from 15.9 per cent in August, while allocations to India by GEM funds increased to 13.1 per cent in September from 12.5 per cent in August.

Allocations by Asia ex-Japan non-ETFs to India increased to 17.1 per cent in September from 16.7 per cent in August, while allocations to India by GEM non-ETFs increased to 12.6 per cent from 12.2 per cent in August.

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.

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.

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