India dedicated funds see 49th straight week of inflows

NEW DELHI: India dedicated funds have now seen the 49th straight week of inflows, Elara Securities said in a report.

The inflows include $712 million this week after $766 million in the previous week. Largecap funds continued to see the biggest portion of this flows ($631 million).

Some revival is also seen in smallcap funds where a total $280 million has come in the past nine months. India flows continue to be strongest from US investors ($215 million), followed by Ireland ($177 million) and Japan ($124 million) investors, the report said.

Countries where both domestic and foreign inflows are strong include the US, Japan and India, the tracker said.

On the other hand, China is witnessing strong domestic inflows, but foreign flows are still weak. Over the past month, the pace of inflows by domestic investors into Chinese equity was strongest since 2015.

Overall, the global liquidity situation continues to remain benign with most markets witnessing strong domestic flows, it added.

"China funds have started showing strong outperformance over India funds, finally. Similar outperformance was seen in May 2022 after which we saw a round chasing into this trade. Likewise, the second big leg was from November 2022 to February 2023 with an outperformance of 40 per cent," the report said.

With the strong domestic flows and beginning of outperformance, it will be key to see if foreign flows start shifting there, though there is no signs of this trade as of now, the report said.