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India Equity Research Reports, IPO and Stock News
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Strategy
Foreign fund-flow tracker
ETF flows remain positive across EM as India allocations come off lows. Our
foreign fund-flow tracker offers a comprehensive view of market flow activity in India
and among its emerging market peers. Using a top-down approach, we analyze country
flows and the underlying factors which affect them such as fund flows and country
allocations for different fund types.
Country flows – India continues to witness outflows; Korea sees strongest inflows last month
Total flows to India have remained negative in the past four weeks (ending July 27, 2011) even as
ETFs, in contrast, saw inflows during the period. In fact, ETF flows across the EM region have been
positive in the past month. Indonesia and China have seen a large proportion of their inflows
coming through ETFs. Korea saw the strongest inflows (in US$ terms) last month, while Taiwan
and Indonesia saw the strongest inflows in percentage terms on a 3-month basis.
Country allocations – Cash balances rise even as allocations to India come off lows
Allocations to India have reversed their recent downtrend in June as valuations remained
reasonable. Asia ex-Japan funds increased their allocations to India from 10.5% to 10.8% while
GEM funds went up from 8.4% to 8.8%. Cash balances in Asia ex-Japan funds went up from
2.2% to 2.7% between May and June. Considering the average cash balance of ~3.2% for
CY2010, the current levels are not very alarming. On a 3-month basis, Indian allocations are still
down 0.7% within the universe of Asia ex-Japan funds.
Fund flows – 10 largest India-only funds have witnessed a cumulative outflow of US$190 mn
Exchange traded products like Lyxor MSCI India ETF have seen net inflows of US$34 mn,
underscoring how ETFs bucked the trend. BNP Paribas L1 Equity India has witnessed the largest
inflows in the past month for the India-only universe. BNP Paribas funds seem to be ramping up
fund size in the Asia ex-Japan region, especially India and China. A couple of India’s largest funds
feature in the list of the highest outflows in the Asia ex-Japan universe, indicating the relative large
magnitude of the outflows.
On the GEM front, Vanguard MSCI EM ETFs continue to be preferred over iShares MSCI EM.
Within a 12-week period, Vanguard’s MSCI EM ETF has seen inflows worth US$2.98 bn (~6% of
total corpus) while iShares saw an outflow of US$1.18 bn.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Strategy
Foreign fund-flow tracker
ETF flows remain positive across EM as India allocations come off lows. Our
foreign fund-flow tracker offers a comprehensive view of market flow activity in India
and among its emerging market peers. Using a top-down approach, we analyze country
flows and the underlying factors which affect them such as fund flows and country
allocations for different fund types.
Country flows – India continues to witness outflows; Korea sees strongest inflows last month
Total flows to India have remained negative in the past four weeks (ending July 27, 2011) even as
ETFs, in contrast, saw inflows during the period. In fact, ETF flows across the EM region have been
positive in the past month. Indonesia and China have seen a large proportion of their inflows
coming through ETFs. Korea saw the strongest inflows (in US$ terms) last month, while Taiwan
and Indonesia saw the strongest inflows in percentage terms on a 3-month basis.
Country allocations – Cash balances rise even as allocations to India come off lows
Allocations to India have reversed their recent downtrend in June as valuations remained
reasonable. Asia ex-Japan funds increased their allocations to India from 10.5% to 10.8% while
GEM funds went up from 8.4% to 8.8%. Cash balances in Asia ex-Japan funds went up from
2.2% to 2.7% between May and June. Considering the average cash balance of ~3.2% for
CY2010, the current levels are not very alarming. On a 3-month basis, Indian allocations are still
down 0.7% within the universe of Asia ex-Japan funds.
Fund flows – 10 largest India-only funds have witnessed a cumulative outflow of US$190 mn
Exchange traded products like Lyxor MSCI India ETF have seen net inflows of US$34 mn,
underscoring how ETFs bucked the trend. BNP Paribas L1 Equity India has witnessed the largest
inflows in the past month for the India-only universe. BNP Paribas funds seem to be ramping up
fund size in the Asia ex-Japan region, especially India and China. A couple of India’s largest funds
feature in the list of the highest outflows in the Asia ex-Japan universe, indicating the relative large
magnitude of the outflows.
On the GEM front, Vanguard MSCI EM ETFs continue to be preferred over iShares MSCI EM.
Within a 12-week period, Vanguard’s MSCI EM ETF has seen inflows worth US$2.98 bn (~6% of
total corpus) while iShares saw an outflow of US$1.18 bn.
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