Boost for Indian markets as global exchange-traded funds see flow surge

The Indian market has seen a sharp uptick in overseas flows in recent weeks. Part of this could be on the back of investments by global exchange-traded funds (ETFs). 

According to flow tracking firms, inflows into ETFs with exposure to emerging markets (EMs) and Asia Pacific markets, are seeing good investor interests. 

According to flow tracking firm EPFR Global, global ETFs with exposure to Indian equity markets got $917 million inflows in January. Besides ETFs, non-ETF, or actively-managed global funds, saw positive flows following sharp outflows in the previous six months.

Put together, the total inflow into global funds investing in India stood at $1.03 billion. In February, the Indian market saw the overseas investment of $2.4 billion. Just like domestic mutual funds, investors put money in global funds, which are then deployed to purchase equities. While the ETF flow data for February isn’t available yet, the inflow trend remains positive, experts say. The uptick in flows comes amid the US Federal Reserve putting a pause to the interest rate hike cycle.