China corners bulk of EPFR flows in August among emerging markets

Listed emerging market fund flows were positive for almost all countries. China saw the most flows among emerging markets in August, worth $6.7 billion, followed by South Korea ($3.4 billion) and Taiwan ($2.1 billion). Flows into India totalled $983 million during the month, the EPFR data compiled by Kotak Institutional Equities shows.

India-dedicated funds saw outflows to the tune of $165 million in August, taking total outflows for CY21 to $2.6 billion, the EPFR data compiled by Kotak Institutional Equities shows.

Global emerging market (GEM) funds saw inflows of $1.1 billion, taking the CY21 inflows to about $6.6 billion.

Assets under management (AUM) of India-dedicated funds have risen 18.3 per cent in the year to August to $45.9 billion. AUM of GEMs have risen 36.5 per cent to $154.5 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.

The overall allocations to India by Asia ex-Japan funds increased to 15.9 per cent in August from 14.8 per cent in July, while that by GEM funds increased to 12.5 per cent in August from 11.6 per cent in the previous month.

Financials witnessed heavy selling in August, with outflows of $338 million, whereas consumer staples ($283 million) and utilities ($213 million) saw the most buying.