India-dedicated funds pull out over $3 billion so far this year: EPFR data

India-dedicated funds saw outflows to the tune of $375 million in August, taking their year-to-date outflows to $3.2 billion, an EPFR data compiled by Kotak Institutional Equities shows.

Global emerging market (GEM) funds saw outflows to the tune of $868 million, paring the 2019 inflows by these funds to about $181 million. Outflows from India-dedicated, GEM and other categories of funds totalled nearly $1.5 billion in August.

Assets under management (AUM) of India-dedicated funds have slid 22 per cent in the past year to $42.3 billion. In comparison, AUM of GEMs have slid only marginally by 0.5 per cent to $75.7 billion.

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.

The Indian markets slid 0.4 per cent in August, as FPIs pulled out about $2.2 billion owing to sustained selling seen in the aftermath of the enhanced surcharge introduced in the Union Budget on July 5.

The overall allocation to India by Asia ex-Japan funds increased to 13.3 per cent in August from 13.1 per cent in July, while that by GEM funds increased to 9.7 per cent from 9.5 per cent in the previous month.

The majority of the sectors witnessed selling in August. Financials witnessed heavy selling, with outflows to the tune of $1.2 billion. Utilities, consumer discretionary and telecommunication received marginal inflows.