KIE’s foreign fund-flow tracker gives a comprehensive view of the market flow by listed funds into India and its emerging market (EM) peers. These market participants are further classified based on their investment styles [passive (ETFs) or active (non-ETFs)] in an attempt to understand the intent and sentiments governing the flows. Please note there is a difference between EPFR-reported fund flows and FPI flows reported by NSDL. EPFR fund flow data primarily tracks mutual funds, ETFs, closed-end funds and variable annuity funds/insurance-linked funds, whereas FPI flows reported by NSDL also capture investments from hedge funds, proprietary desks and sovereign wealth funds.
March month flow update—
* India flows—March saw net buying by FPIs of US$2 bn. However, listed funds saw muted inflows of US$125 mn, spilt into US$189 mn of ETF inflows and US$64 mn of non-ETF outflows. India-dedicated funds saw outflows of US$474 mn while GEM funds saw inflows of US$495 mn.
* Emerging market flows—China saw the highest inflows of US$3.1 bn, led by strong ETF (US$1.2 bn) and non-ETF flows (US$1.9 bn). Total FPI activity and EPFR activity showed divergent trends for all the countries in March.
* Country allocations—allocations to India and China constitute more than one-third of the average Asia ex- Japan fund portfolio. Allocation to India by Asia ex-Japanese funds increased to 12% in March from 11.3% in the previous month. Fund allocation to India by GEM funds dwindled to 9.5% from 10.2% at the start of the year. Allocation by Asia ex-Japan non-ETF funds to India increased to 12.6% in March from 11.9% in February. Allocation to India by GEM ETF funds fell to 9% in March from 9.2% in the previous month.
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