India-focused funds: Redemptions since July at $3 bn; $328 mn this week

India-focused funds saw $382 million in outflows this week, even as global investors shifted towards China and gold, Elara Capital reported

India-focused funds have witnessed redemptions nearing $3 billion since July, according to a report by Elara Capital. The majority of these outflows have come from long-only funds. This week, redemptions surged to a two-month high of $382 million, a sharp increase from $197 million last week and $72 million the week before. 

Among global markets, India has witnessed the highest fund outflows, with investors shifting their preference toward China and gold. Despite the heavy redemptions, net flows into Indian markets since July remain largely flat, thanks to continued support from global emerging market funds. 

“China remains the preferred destination, continuing to attract a larger share of allocations compared to India. Japan-domiciled funds, particularly those focused on retail investors, have become a major source of redemptions from India,” stated Elara Capital in its latest note. 

Meanwhile, precious metal funds continued their remarkable momentum, recording $11 billion of inflows this week — nearly double last week’s $6 billion, according to Elara. Over the past two months, these funds have absorbed an unprecedented $80 billion, marking the strongest period of inflows in EPFR history.