Anti-dollar trade gains momentum as capital flows Into emerging markets; India ETFs see 7-month high inflows

According to Elara, similar historical phases of strong GEM inflows have carried important market implications. During 2016–18, the MSCI Emerging Markets Index rallied approximately 80%, with only a brief 10% drawdown after the election of Donald Trump in late 2016.

• India-focused funds see $217 million inflow, a 7-month high
• GEM equity funds attract $6.9 billion, strongest since 2016–18
• Energy and gold funds also report strong inflows this week

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India-focused funds have recorded their strongest inflows in seven months, even as global capital continues to rotate decisively toward emerging markets and energy plays, according to Elara Capital's Global Liquidity Tracker.

According to Elara’s latest flow analysis based on EPFR data, India-focused funds saw a $217 million inflow this week, marking a seven-month high. The inflows were driven entirely by exchange-traded funds (ETFs), primarily U.S.- and Ireland-domiciled vehicles.

However, according to Elara, dedicated long-only India funds have continued to face redemptions since September 2025, largely from Japan- and Luxembourg-based funds. Despite that, aggregate India flows, including both allocation and focused mandates, have improved sharply over the past three weeks.

According to the brokerage, of the $3.5 billion in total India-related inflows during this period, $3 billion came from Global Emerging Market (GEM) funds, while $285 million was contributed by Asia ex-Japan (AXJ) funds. The data suggests that India is benefiting significantly from broader emerging market allocation shifts rather than purely domestic conviction flows.

GEM inflows at multi-year highs

Globally, flows continue to reinforce what Elara describes as a sustained “anti-dollar” positioning theme. According to the report, GEM equity funds attracted another $6.9 billion in inflows this week, following $5 billion and $11 billion in the previous two weeks. This marks the strongest three-week momentum in GEM flows since the 2016–18 cycle.

According to Elara, similar historical phases of strong GEM inflows have carried important market implications. During 2016–18, the MSCI Emerging Markets Index rallied approximately 80%, with only a brief 10% drawdown after the election of Donald Trump in late 2016.

In contrast, according to the brokerage, the 2021 surge in flows failed to trigger a sustained breakout, with the EM index subsequently correcting nearly 40%. The current momentum, Elara noted, more closely resembles the 2016–18 phase, with the index now attempting to clear its 2008 and 2021 highs — signaling improving structural strength.

Energy, gold reflect dollar weakness positioning

The strength in emerging market allocations is mirrored in energy equities. According to Elara, energy equity funds are witnessing their strongest inflow cycle since June 2020, suggesting global investors are positioning for potentially higher crude prices. During the 2020–21 upcycle, crude prices had doubled from pre-COVID levels.

Commodity equity funds have recorded inflows for 11 consecutive weeks, although the pace has moderated in the past two weeks, according to the data cited in the report.

Gold funds saw $3.5 billion in inflows this week, reversing the previous week’s $2.7 billion outflow — the first redemption in three months. Silver funds, meanwhile, recorded a modest $179 million outflow after a sharp $1.5 billion inflow in the prior week, which Elara said was consistent with consolidation following earlier overstretched positioning.