Redemption in India-focused global funds has witnessed the steepest rise since January during the past four weeks, while flows into China and Hong Kong have increased. For the four weeks ended August 20, foreign allocators took out $1.8 billion from India, data released by Elara Capital on Friday showed.
During the reviewed period, flows into Indian market were the least among its Asian peers. In contrast, $3 billion was invested in China and $4.5 billion in Hong Kong, highlighting a reversal of the Sino-India rotation trade that had dominated 2023–2024.
The Trump effect and fund-specific outflows 🇺🇸
The report said between March and September 2024, India attracted $29-billion inflows while China lost $26 billion. “However, after Trump’s victory in October, this trend has flipped: India has seen $3.7-billion outflows, while China has attracted $5.4 billion.”
Elara noted that inflows after the Trump tariff turmoil in April were concentrated in ETFs, while long-only funds have been under consistent redemption pressure since October. Of the recent $1.8-billion India redemptions, $1 billion came from ETFs and $770 million from active funds, it said.
Broader trends and market Impact
According to the report, major active outflows over the past four weeks came from Wisdom Tree, Invesco, Schroder, Amundi, and Franklin India, primarily large-cap-oriented funds, adding supply pressure on bigger Indian stocks.
US-dedicated flows remain volatile with flat net flows since April. “The only support for US flows since April 2025 has been the money flowing through global funds where the US has 63% weight,” it said. “Global high-yield bond funds recorded inflows for the 16th straight week, though the momentum slowed to just $625 million, compared to a weekly average of $2.5 billion since April 2025.”