India-focused offshore funds and exchange-traded funds (ETFs) registered a net inflow of over USD 1 billion in July-September 2014, signalling growing interest by foreign investors in the country's growth story.
According to a report by mutual fund tracker Morningstar: "India-focused offshore funds and ETFs registered a net inflow of USD 1.18 billion for the third quarter of the calendar year 2014."
This is the second successive quarter of inflows into India-focused funds after eight straight quarters of outflow "which indicates the growing interest by foreign investors in the India story."
Of this, India-focused mutual funds registered inflow of USD 678 million, while ETFs posted USD 505 million of inflow.
The strongest inflows came in the month of September at USD 490 million, following inflow of USD 171 million and USD 45 million in July and August, respectively.
An offshore India fund is one that is not domiciled in India but invests primarily in Indian markets.
In comparison, overseas investors poured in a staggering USD 14 billion into Indian equities till September 2014, of which USD 3.1 billion came in the third quarter.
Assets of all India-focused offshore funds and ETFs increased by 6.6 percent to about USD 38.3 billion at the end of September 2014.
The total assets of these funds and ETFs are still down by 31 percent from the peak of USD 55.7 billion in 2010.
Overall, India-focused offshore funds and ETFs witnessed a net outflow of USD 4.75 billion and USD 1.8 billion during 2013 and 2012, respectively.
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