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India-focused offshore funds and exchange-traded funds (ETFs) registered outflows totalling over $900 million in the January-March quarter, despite overseas investors pumping in a staggering $3.65 billion into the country's equity market, according to a report.
An offshore India fund is one that is not domiciled in India but invests primarily in Indian markets.
"India-focused offshore funds and ETFs registered a net outflow of $0.9 billion for the first quarter. This consists of $878 million of outflows from offshore funds and $30 million of outflows from offshore ETFs," the report by mutual fund tracker Morningstar said.
The outflows were seen in January and February, while there were inflows in March.
During the January-March period of 2014, overseas investors infused a net amount of $3.65 billion into the country's stock market.
Assets of all India-focused offshore funds and ETFs increased by six% during the first quarter to about $31.4 billion at the end of March 2014. The total assets of these funds and ETFs are now down by a massive 44% from the peak of $55.7 billion in 2010.
India-focused offshore equity funds and ETFs delivered an average return of 8.75% (in $terms) during the quarter, outperforming the MSCI India Index by 0.6%.
Also, the country's equity markets managed to close on a high note in the first quarter, with the benchmark S&P BSE Sensex index rising 5.74%.
