India-dedicated funds see $5-billion outflows in one year, shows data

GEM funds are the prime drivers of flows into emerging markets as they have assets under management of $123 billion

India-dedicated funds saw outflows to the tune of $905 million, taking their 12-month outflow tally to $5.1 billion, according to a report by Kotak Institutional Equities (KIE) based on EPFR data. Global emerging market (GEM), and other funds, such as Asia ex-Japan regional, BRIC and global funds, have managed to more than offset these outflows. GEM funds saw inflows of $522 million in April and nearly $5 billion on a 12-month basis, while other global funds saw inflows of $376 million and $4.1 billion over 12 months.
 
GEM funds are the prime drivers of flows into emerging markets as they have assets under management (AUM) of $123 billion.
 
These funds invest in the markets, such as China, India, Taiwan, South Korea and Brazil. Allocations to China and India make up for nearly half the portfolio of GEM funds.
 
Allocation towards India by GEM funds declined to 10.2 per cent in April, from 10.6 per cent in March, while that by Asia ex-Japan funds declined to 12.7 per cent, from 13.3 per cent in March, according to KIE.
 
GEM funds — both ETF and non-ETF— have seen their assets soar 90 per cent in the past year. The jump in assets has been underpinned by a sharp rally in stock prices, with the MSCI EM index surging 48 per cent in the past year.