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India-focussed offshore funds and ETFs witnessed healthy inflows in the April-June quarter, according to a Morningstar study. India-focussed funds have received $2.6 billion, higher than the net inflow of $2 billion they had garnered in the preceding quarter ending March.
So far this year (until June 2017), the category has received net assets worth $4.6 billion. During the same period last year, the India-focussed offshore funds and ETFs witnessed a net outflow of $2.3 billion, Morningstar said.
An offshore India fund primarily invests in the domestic market, but is domiciled outside India.
The assets of India-focussed offshore funds and ETFs moved up significantly to $55.2 billion during the quarter ended June, from $50.1 billion at the end of March. The total assets of the 10 largest India-focussed offshore funds and ETFs stood at $27.3 billion compared with $25.4 billion in the previous quarter and $20.5 billion as of June 30, 2016.
“The March 2017 quarter laid a strong foundation for the June quarter to build upon and excel. The Union Budget announced on February 1, 2017, was broadly in line with market expectations and re-emphasised the government’s resolve towards bringing in key economic reforms,” said Morningstar Investment Adviser India Private Ltd.
Similarly, the outcome of the election of five States in BJP’s favour fanned expectations that this would facilitate decision-making pertaining to significant reforms and strategic policies and would further enhance the implementation of economic measures in a smoother fashion going ahead, it added.
India-focussed offshore funds witnessed higher net inflows than India-focussed offshore ETFs during the quarter.
Of the total quarterly net inflow of $2.6 billion, India-focussed offshore funds registered net inflow of about $2.1 billion, whereas India-focussed offshore ETFs witnessed net inflows of $467 million, it added.
Nomura India Equity, a Japan-domiciled fund, continued to attract investors as it received net assets worth $790 million through the quarter, significantly higher than the $257 million it had received in the previous quarter. However, iShares MSCI India retained its top spot as the largest India-focussed offshore fund and ETF in Q1. Robust inflows helped the fund’s asset size to grow to $55.2 billion from $50.1 billion in Q1.
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