India’s EM Fund Allocations Increase in April
India’s Influence in Emerging Market Funds Grows
In April, India’s proportion of investments in emerging market (EM) funds experienced an upsurge, with global EM fund allocations reaching 17.5% and those in Asia excluding Japan climbing to 19.2%, as reported by Kotak Research. Nonetheless, India experienced an outflow of $453 million, while China confronted an even larger outflow of $8.7 billion. Conversely, Brazil successfully attracted $409 million in inflows.
According to a recent report from Kotak Institutional Research released on Monday, foreign funds adhering to global emerging market mandates increased their investments in India to 19.5% in April, up from 18.7% in March. Meanwhile, actively managed Asia ex-Japan funds raised their stakes in India to 19.2%, up from 18%, while allocations by actively managed global emerging market funds expanded from 16.7% in March to 17.5% in April.
Market Overview
Asia ex-Japan and global emerging markets represent the two predominant investment categories in India for foreign portfolio investors (FPIs), who collectively own more than $800 billion in Indian equities. April witnessed a notable outflow of $8.7 billion from China in the context of listed emerging market funds. Most countries recorded negative inflows, with the exception of Brazil, which achieved inflows of $409 million. During the same period, India, along with Taiwan and South Korea, faced outflows amounting to $453 million, $828 million, and $710 million, respectively.
