Assets of 10 top offshore funds and ETFs drop 7% in March quarter

The assets of the 10 largest India-focused offshore funds and ETFs declined 7 per cent during the quarter ended March 2022 to $20.3 billion. These funds account for almost 50 per cent of the India-focused offshore fund and ETFs category's assets, according to the quarterly Morningstar Offshore Fund Spy report.

India-focused offshore funds and ETF category saw net outflows of $1.28 billion, the 16th-consecutive quarter of net outflows. The category gave negative returns of 4.01 per cent during the quarter, underperforming MSCI India USD Index, which fell by 1.81 per cent.

iShares MSCI India ETF, the largest fund in the India-focused offshore funds and ETFs category, was the worst hit with a net outflow of $317 million. Also, over a one-year period, the fund has experienced the third-largest outflow of net assets, amounting to $363 million. It is a U.S.-domiciled India-focused exchange-traded fund launched in February 2012.

With a net outflow of $88 million, PineBridge India Equity Y was the second-worst-hit fund during the quarter. In the previous quarter, the fund lost a marginal $125 million, and over a one-year period it has witnessed a net outflow of $201 million.

With a net inflow of $58 million, GS India Equity I Inc USD was the biggest beneficiary during the quarter ended March 2022. In the previous quarter, the fund had a net outflow of $177 million, which was the third highest within the category. It is an actively managed India-focused fund domiciled in Luxembourg and launched in March 2008. In the last year the fund has received a net inflow of $17 million. This is also the second-largest fund in the India-focused offshore funds and ETF category with an asset size of $2.3 billion.

Given the tepid performance of the Indian equity markets in the March 2022 quarter, all the 10 largest India-focused offshore funds and ETFs delivered negative returns during the quarter. iShares MSCI India ETF USD Acc was the top-performing fund among the top-10 largest India-focused offshore funds and ETFs. Although it fell by 2.0%, it managed to outperform the category average of negative 4 per cent.

Nissay India Selected Equity Fund was the top-performing fund in the India-focused offshore fund and ETF category during the quarter. It delivered a 3.6 per cent return and outperformed the category average (negative 4 per cent) and MSCI India USD Index (negative 1.8 per cent) by a huge margin.

The second-best-performing fund during the quarter was Eastspring India Infra Equity Fund. The fund clocked a return of 2.9 per cent during the quarter, thus outperforming the category average as well as MSCI India USD Index by a healthy margin. The fund has delivered an impressive performance over one- and three-year periods where it is far above the category as well as index. This is again a predominantly large-cap fund with around 80 per cent of exposure in large-cap stocks.