India-dedicated funds pull out $653 million in July, shows EPFR data

The overall allocation to India by Asia ex-Japan funds declined to 13.1%
India-dedicated funds saw outflows to the tune of $653 million in July, taking their total outflows in CY19 to $2.8 billion, EPFR data compiled by Kotak Institutional Equities shows.

Global emerging market (GEM) funds also saw outflows to the tune of $275 million, paring the 2019 inflows by these funds to about $1 billion. Outflows from India-dedicated GEM and other categories of funds from India totalled nearly $1 billion in July.

Assets under management (AUM) of India-dedicated funds have slid by about a fifth in the past year to $44.2 billion. In comparison, AUM of GEMs have slid only marginally by 1.6 per cent to $77.5 billion.

EPFR fund-flow data primarily tracks mutual funds, ETFs, closed-end funds, and variable annuity funds/insurance-linked funds. It does not include investments from hedge funds, proprietary desks and sovereign wealth funds, which are tracked by NSDL.

The Indian markets slid about 4.8 per cent in July, as FPIs pulled out about $1.9 billion in the aftermath of the surcharge hike introduced in the Union Budget on July 5.

The overall allocation to India by Asia ex-Japan funds declined to 13.1 per cent in July from 13.4 per cent in June, while that by GEM funds declined to 9.5 per cent from 10 per cent in the previous month.

Almost all sectors witnessed selling in July. The Information technology and the financials sectors witnessed heavy selling, with outflows to the tune of $865 million and $827 billion, respectively. Utilities and telecommunication received marginal inflows.

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