Assets under management of top India-focused offshore equity funds shrink

Assets under management (AUM) of most of the top India-focused offshore equity funds have seen a decline in the past one year despite the benchmark S&P BSE Sensex rising 15 per cent. The total AUM of top 10 funds shrunk by 1.4 per cent to $26 billion for the one-year period ending June 2018, data provided by fund Morningstar showed. The drop in assets is on the back of $1.2 billion of outflows from these funds. iShares MSCI India, the largest offshore 100 per cent India-focused exchange traded fund (ETF), saw its AUM drop by 4.3 per cent to $4.8 billion and outflows of $391 million during the period. Aberdeen Global Indian Equity saw the sharpest drop in assets at 38 per cent to $2 billion from $3.3 billion at the end of June 2017.

It also saw outflows of $1.4 billion. On the other hand, two funds saw good inflows of $2.5 billion. The top 10 funds account for around half of the overall assets of India-focused offshore funds. These funds are an important source of foreign inflows into India. The other key source of foreign flows is global ETFs and actively-managed offshore funds. The poor scorecard of top India-focused offshore funds has weighed on foreign portfolio investor (FPI) flows. For the 12-month ended June 2018, FPI outflows stood at $500 million.