Dear Reader,
We are pleased to present the June 2012 quarter-end edition of the “Morningstar Offshore India Fund Spy”. The report gives an insight into performance and flow / asset trends of Offshore India Funds captured in the Morningstar Global Database. Please refer to the report for more details on methodology.
This time, we have included India focused offshore funds & ETFs from the U.S. into the report. We have also combined flows and assets of all India focused offshore funds and ETFs from different regions (including Europe, US, Japan and South Korea) into one section. All flows and assets data is denominated in USD.
Please click here to download the full report.
Key Takeaways:
A)
Asset Flows and Assets of India-Focused Offshore Funds & ETFs:
- India focused offshore funds & ETFs registered an outflow of $1.1 billion during the second quarter of 2012 (April-June), after a healthy inflow of $798 million in the first quarter. The sharp depreciation in the rupee, coupled with macroeconomic concerns of a slowdown and ballooning deficit, weighed on sentiments and resulted in outflows during the quarter.
- Assets of all India focused offshore India funds & ETFs fell by about 12% to $33 billion during the second quarter of 2012. The cumulative assets of these funds & ETFs are now down by almost 40% from a peak of about $54 billion at the end of 2010.
- In the second quarter of 2012, HSBC GIF Indian Equity registered the biggest outflow of $206 million among all India focused offshore funds and ETFs. The fund has also registered the biggest outflow of $502 million, over the past year.
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Aberdeen Global Indian Equity Fund, recorded the highest inflow of $247 million during the second quarter, after seeing lackluster flows in the first quarter.
B)
Performance of India-Focused Offshore Funds & ETFs:
- The sharp depreciation in the rupee hampered the performance of offshore India focused funds and ETFs during the second quarter of 2012. They delivered an average return of -10% during the quarter, compared to the hefty positive return of 19% in the previous quarter.
- The rupee was among the bottom performing currencies against the U.S. Dollar—depreciating by close to 9% during the second quarter, and about 20% over the past year. The downgrade of India's outlook to negative by S&P was one of the key reasons for the rupee’s sharp fall during the quarter.
- Among the ten largest India focused offshore funds and ETFs, HSBC India Open, domiciled in Japan was the bottom performer during the quarter—delivering a return of -15%, compared to the -10% returned by the MSCI India NR USD Index.
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HSBC GIF Indian Equity A Acc again disappointed during the second quarter, after managing a good show in the previous quarter. It was among the bottom ten performers from the entire India pack—delivering a return of -13.82%, compared to the MSCI India index’s -10%.
- However one fund that has stood out in terms of performance from the group of ten largest offshore India funds was Aberdeen Global Indian Equity. This 5-star Morningstar rated fund was among the top ten performers from the entire India pack in this quarter, as well as over the past year.
