Total listed fund flows into India amounted to $0.95 billion during the period. ETF participation was India-focused ($0.13 billion) as well as EM-focused ($0.38 billion). With total net FII inflows into India ($2.5 billion) superseding listed fund activity substantially, other market participants were active in July as well.
Allocations to India by Asia ex-Japan funds touched 12.7% in June 2014, which was 0.3% higher than May (12.4%), according to the report. China, India and Taiwan were the preferred investment destinations in the Asia ex-Japan region in June. GEM funds have seen allocations to India stabilise at 10.6%. Taiwan and Russia saw an increase in allocations over the past three months. Korea saw reduction in allocations by Asia ex-Japan funds and GEM funds.
Smart beta is being preferred over plain-vanilla products in the India ETF landscape with WisdomTree India Earnings Fund (EPI) attracting $0.6 billion over the past three months, said the report. While most prevalent index methodologies base their index construction on free-float and investability, EPI allocates higher weights to more profitable companies, thereby offering cheaper benchmark valuations.