China corners bulk of foreign flows in September among emerging markets

China witnessed the most flows among emerging markets for the second month in a row, with inflows of $10.8 billion in September. In comparison, flows into Brazil and India totalled $587 million and $362 million during the month, while Taiwan and Thailand saw outflows of $516 million and $207 million, respectively, the EPFR data compiled by Kotak Institutional Equities shows.

India-dedicated funds saw inflows of $172 million in September, paring total outflows for CY21 to $2.5 billion. Global emerging market (GEM) funds saw inflows of $118 million, taking the CY21 inflows to about $6.7 billion.

Assets under management (AUM) of India-dedicated funds have risen 19.4 per cent in the year to September standing at $46.4 billion. AUM of GEMs have risen 37.6 per cent to $155.8 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.

The overall allocations to India by Asia, ex-Japan, funds increased to 16.3 per cent in September from 15.9 per cent in August, while that by GEM funds increased to 13.1 per cent in September from 12.2 per cent in the previous month. Telecommunication services and consumer staples witnessed heavy buying in September, with inflows of $926 million and $503 million, respectively. Information Technology saw the most selling at $502 million.