Offshore India funds, ETFs register $1.1 billionn inflow in January

India-focused offshore funds, as well as Exchange Traded Funds (ETFs), witnessed a net inflow of $1.1 billion (over Rs 7,100 crore) in January, making it the highest inflow in 10 months, according to a report by Morningstar.

This comes following an inflow of $ 6.5 billion in these funds in 2017.

Offshore India funds not domiciled in India receive flow from overseas investors and in turn, invest the money in Indian markets. India-focused offshore funds and ETFs are a subset of the overall foreign portfolio investor (FPI) flows.

According to the report, India-focused offshore funds have seen an investment of $876 million in January, while ETFs witnessed an infusion of $224 million, translating into a total of $1.1 billion.

This also marked the highest investment since March 2017, when such funds had received net inflow to the tune of $1.2 billion.

Generally, investment through India-focused offshore funds are long-term in nature while that of ETFs are for short term.

"Despite challenges, India-focused offshore funds continued to receive net inflows throughout 2017; whereas outflows have typically happened from India-focused offshore ETFs," Morningstar India Senior Analyst Manager Research Himanshu Srivastava said.

"The current trends are more of a short-term disruption rather than long-term structural changes. So, I am inclined to believe that the trend in India-focused offshore funds and ETFs will not be very different from what we have observed in the past," he added.