India-focused funds see $417-mn outflows in July

India-dedicated funds saw outflows of $417 million in July, led by non-etf (exchange-traded funds) that accounted for $365 million, taking the total outflows in the category to $2.5 billion thus far in calendar year 2021 (CY21), according to the EPFR data compiled by Kotak Institutional Equities.

Flows from global emerging market (GEM) funds into India in July amounted to $459 million, led by non-etf inflows of $318 million, taking the total inflows in CY21 to $5.6 billion. Inflows from India-dedicated, GEM, and other categories of funds into India totalled $6.1 billion in CY21.

Assets under management (AUM) of India-dedicated funds have risen 9.6 per cent till July to $42.6 billion. AUM of GEMS has surged 23 per cent to $139.4 billion in the same period.

Listed EM fund flows were positive for most countries. China witnessed $5.2 billion of inflows, followed by Taiwan and South Korea, which saw $979 million and $219 million of inflows, respectively.

The EPFR fund-flow data primarily tracks mutual funds, ETFS, closed-end funds, variable annuity funds, and insurance-linked funds. It does not include investments from hedge funds, proprietary desks and sovereign wealth funds, which are tracked by NSDL.

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 14.8 per cent in July from 13.5 per cent the previous month, while allocations to India by GEM funds increased to 11.6 per cent from 10.8 per cent in the same period.

Allocations by Asia exjapan non-etfs to India increased to 15.6 per cent in July from 14.3 per cent the previous month, while allocations to India by GEM nonetfs increased to 11.2 per cent from 10.6 per cent.

Financials witnessed heavy selling in July, with outflows of $1.5 billion, while consumer discretionary saw the most buying at $517 million.