More allocations to India: report

Inflows up from ETFs, outflows ease from active funds

The amount of money betting on the Indian stock markets has gone up in recent times, with regional funds too showing strong allocations to the India story.

“India saw inflows ($274 mn) from ETFs during the period, with India-dedicated ETF participation superseding that of its EM-focused peers. Outflows from India-focused active funds also eased in March in contrast to the trend seen earlier,” according to a Kotak Securities (Institutional) Foreign fund-flow tracker report authored by Saifullah Rais.

Total flows to India are $116 million. There were ETF inflows of $274 million and non-ETF outflows of $158 million, according to data from the report.

“Allocations by Asia ex-Japan funds favor India and Taiwan over Brazil and Korea...EM-focused ETFs turn positive in the latter half of March; India-focused ETFs see strong inflows as well,” said the report dated April 11, based on data from global fund-flow tracket EPFR.

The report added that money to India funds amongst Global Emerging Market(GEM) funds was up 9.9% in February 2014. Funds investing in Asian countries excluding Japan had increased 0.4% to 11.8%, noted the report.  

GEM and Asia ex-Japan have favored India and Taiwan over China and Korea in recent times, added the report.