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India continues to be a preferred market for foreign investors, if country flows in the month of January are anything to go by. Listed India-focused funds saw 'record' inflows of $1.7 billion in January, while most other emerging markets saw redemptions to the tune of $3 bn.
Foreign institutional investors (FIIs) have pumped in $2.87 bn into Indian equities in January, of which majority has come from listed funds. In February so far, FIIs have remained net sellers to the tune of $348 million.
Kotak Institutional Equities has a foreign fund tracker, which gives comprehensive view on fund flows of listed funds (passive exchange traded funds and active non-ETFs) into India and other emerging markets. The tracker intends to monitor both passive and active fund flows to get a sense of intent and direction of foreign investors.
Listed funds account for a large part of FII activity in India, claim experts. According to Kotak, net inflows into India amounted to $1.3 bn with active and passive channels attracting capital in January. India-focused active funds saw inflows worth $0.8 bn while their passive counterparts roped in $0.88 bn during the period. India continues to be an outlier as most other emerging markets have seen outflows during the month.
Funds benchmarked against the MSCI-EM Index pulled out $2.5 bn in January. Equity strategists believe that India and China are benefiting at the expense of other markets like Brazil and Russia.
