The Morningstar Offshore Fund Spy is a quarterly report that gives an insight into performance and flow trends of funds investing into India as per the Morningstar Global Database.
Below are some takeaways from the detailed report.
- The data is for the December 2015 quarter, unless specified otherwise.
- The category refers to India-focused offshore equity funds and ETFs.
Assets and Flows
- For the second consecutive quarter, this category recorded a net outflow of $786 million.
In the quarter ended September 2015, $2.2 billion was eroded from the category, which was the highest since the third quarter of 2011, when it registered a net outflow of $2.5 billion.
- Of the total quarterly net outflow of $0.8 billion, India-focused offshore equity funds witnessed a net outflow of $0.3 billion, whereas India-focused ETFs registered a net outflow of about $0.5 billion.
- Assets declined to about $43.1 billion (end December), from $44.1 billion (September). Though, the assets as of December 2015 were higher than the $41.0 billion recorded in December 2014.
Performance
- The Sensex fell by 0.14% (end December) against a loss of 5.85% (end September).
- The category surged by 0.1% (in USD terms) during the quarter, outperforming the U.S.-dollar-denominated MSCI India USD Index, which fell 0.9%.
Asset flows into the Indian market from funds with partial allocations
- The assets of other regionally diversified equity funds and ETFs surged to $4.2 trillion as of the quarter ended December 2015, compared with $4.0 trillion at the end of the previous quarter.
- The value of investment into Indian equities by foreign funds also soared to $164.8 billion, against an estimated $141 billion during the quarter ended September 2015.
- While the net inflows from global funds were estimated to be around $1 billion, emerging-markets funds pumped an estimated $24.9 billion into the Indian equity market. Asia/Asia-Pacific funds, in contrast, pulled out about $0.6 billion worth of investments from Indian equities.
- Except for emerging-markets funds, the allocation (in percentage terms) to Indian equities in global funds and Asia/Asia-Pacific funds decreased during the quarter.
- The estimated investments of emerging-markets funds into Indian equities surged sharply from $38.6 billion in the previous quarter to $63.1 billion as of December 2015. Subsequently, their exposure to Indian equities also moved up to 12.1% during the quarter from 7.5% in the previous quarter.
