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India-focused offshore funds and exchange-traded funds (ETFs) registered a net inflow of over $1 billion in July-September 2014, signalling growing interest by foreign investors in the country's growth story.
According to a report by mutual fund tracker Morningstar: "India-focused offshore funds and ETFs registered a net inflow of $1.18 billion for the third quarter of the calendar year 2014."
This is the second successive quarter of inflows into India-focused funds after eight straight quarters of outflow "which indicates the growing interest by foreign investors in the India story."
Of this, India-focused mutual funds registered inflow of $678 million, while ETFs posted $505 million of inflow.
The strongest inflows came in the month of September at $490 million, following inflow of $171 million and $45 million in July and August, respectively.
An offshore India fund is one that is not domiciled in India but invests primarily in Indian markets.
In comparison, overseas investors poured in a staggering $14 billion into Indian equities till September 2014, of which $3.1 billion came in the third quarter.
Assets of all India-focused offshore funds and ETFs increased by 6.6% to about $38.3 billion at the end of September 2014. The total assets of these funds and ETFs are still down by 31% from the peak of $55.7 billion in 2010.
Overall, India-focused offshore funds and ETFs witnessed a net outflow of $4.75 billion and $1.8 billion during 2013 and 2012, respectively.
