India leads overseas inflow chart among EMs

Chennai: Listed funds invested $1.3 billion in the Indian markets in August, the highest among emerging markets (EMs) and the largest so far in 2016. India and Taiwan attracted the highest inflows among EMs from listed funds with the latter getting $1 billion during the month.
Passively managed EM funds saw larger inflows compared to their actively managed peers.Passively managed EM funds or exchange traded funds (ETFs) saw inflows of $845 million during the month. EM-dedicated ETFs registered inflows of $4.9 billion in the last four weeks. Funds tracking the MSCI India index recorded inflows of $327 million over the last one month.
Total inflows into India from listed funds came at just $545 million so far in 2016. This was due to large outflows from active funds. Actively managed funds registered outflows of $1.68 billion during the year. ETFs, however, recorded inflows of $2.2 billion in 2016, data compiled by Kotak Institutional Equities showed.
Foreign portfolio investors (FPIs) also continue to remain bullish on India with sovereign wealth funds (SWFs) betting big on equities. SWFs share in FPI assets under custody has jumped to around 11% in July from 8% a year ago.
FPIs, who made net investments of about $4.8 billion in the first seven months of 2016, bought shares in industrials, consumer staples, consumer discretionary and financial services sectors in a big way. The industrials segment was the favourite for FPIs and accounted for 34% of their share purchases in value terms during the period. FPIs offloaded healthcare and telecom stocks. They sold shares in healthcare firms to the tune of $1.07 billion during 2016. Telecom came second with share sales in the sector by FPIs coming at $272 million.
Allocations to India and China constituted more than one-third of the average Asia dedicated funds (excluding Japan) portfolio. Asia (excluding Japan) fund allocations to India remained at around 14%, data showed. Global EM funds allocated 11.6% of their assets to India. Actively managed global EM funds however reduced their India exposure to 13.2% from 13.4% in June.