India-dedicated funds see outflows of $3.9 billion in CY21, shows data

Despite this, the country received $6.2 billion worth of net EPFR foreign flows last year, of which 91% was through passive ETFs

India received $6.2 billion worth of net EPFR foreign flows last year, of which 91 per cent was through passive exchange-traded funds (ETFs). This was despite outflows from India-dedicated funds to the tune of $3.9 billion, the EPFR data compiled by Kotak Institutional Equities shows.

Global emerging market (GEM) funds put in $6.7 billion, while other EPFR funds pumped in $3.3 billion in CY21.

Despite the outflows, assets under management (AUM) of India-dedicated funds rose 16.4 per cent in the past year to $45.2 billion. In comparison, AUM of GEMs rose 35 per cent to $152.6 billion. The total AUM of EPFR India funds rose 29 per cent to $282.8 billion.

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.

For the month of December, EPFR India funds saw outflows of $1.3 billion, led by outflows of $912 million by India-dedicated funds. Listed emerging market fund flows were mixed for all countries. China witnessed $10 billion of inflows, followed by South Korea and Taiwan, which saw $386 mn and $244 mn of inflows, respectively. Brazil and Russia saw outflows of $596 mn and $428 mn, respectively.

The overall allocation to India by Asia ex-Japan funds remained stable at 16.4 per cent in December while allocations to India by GEM funds increased to 13.3 per cent in December from 13.1 per cent in November.

Financials witnessed heavy selling in December, with outflows of $935 million, followed by consumer discretionary ($487 million) and consumer staples ($445 million).

---------------------------------------------------------------------------------------------------------

Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd

EPFR universe India flows

	India-dedicated	GEM	Others	Total
December	-0.9	-0.2	-0.1	-1.3
CY21	-3.9	6.7	3.3	6.2