India funds most hit in credit crisis: Citigroup

India-focussed funds have seen the biggest outflow at $262 million in the Asia-Pacific region during the past couple of weeks, even as net redemption from all offshore Asian funds was low, compared to the equity market meltdown earlier in March this year and May-June 2006.

Offshore country funds are those in which residents of foreign countries park their money. These funds in turn invest in stocks with exposure to the target countries - thus giving the investors an indirect exposure to markets abroad.

Net outflows from all offshore Asian funds were just $74 million in past two weeks when the markets were in turmoil - $73.5 million in the first week of August, followed by just $0.1 million in the second week, according to Citigroup.When unwinding of yen carry trade hit Asian equities in March 2007, a huge redemption of $4.5 billion was seen in three weeks, while outflow amid May-June market corrections last year was $4.9 billion over a six-week period.

The current market fall has caught investors by surprise and they are yet to react, Citigroup analyst Elaine Chu wrote in a research note. "We would not be surprised to see more redemptions when Asian markets rebound in response to the Fed's discount rate cut last Friday," Chu said.

Money was withdrawn the most from India country funds, followed by China funds ($200 million) and Singapore funds ($159 million).

In the week ended August 15 also, India registered the biggest outflow at $122.6 million, followed by $51.3 million in Malaysia and $36.8 million in China.

However, for the past one month and year-to-date periods, outflow from China funds was higher than India.