As foreign institutional investors continued to buy Indian equities, assets of India-focused offshore funds and exchange-traded funds (ETFs) rose by 14% during the three months to June. This was the first quarter of inflows into India-focused funds after eight quarters of outflows. The inflows are mainly a result of improved investor sentiment. But the fact that these inflows came through the ETF route suggests they may be more short-term in nature.
India-focused ETF assets now form about 22% of the total India-focused offshore fund universe against 9% in 2010.
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