Global equity funds see largest outflows in 30 months; India hit by sharpest redemptions since January

The report also notes that the sell-off in India mirrors patterns seen after the October 2024 US election result, when a Trump victory triggered a wave of EM selling.

Global equity markets faced their steepest weekly capital flight in two and a half years, with foreign investors pulling $41.7 billion from equity funds worldwide, according to Elara Securities’ latest Global Liquidity Tracker. The selling was led by US markets, where $35 billion in foreign funds were withdrawn, the largest weekly outflow since August 2011, when S&P downgraded US debt.

For India, the report highlighted that this marked the largest redemption since January 15 with nearly two-thirds of the withdrawals ($418 million) coming from India-focused active funds, their highest outflow since February 19. Active funds have also now seen five consecutive weeks of redemptions totalling $362 million. The report also highlighted that ETFs tracking India saw notable withdrawals of $456 million over the past fortnight, led by iShares MSCI India ETF ($120 million), Franklin FTSE India ETF ($48 million), WisdomTree India Earnings Fund ($45 million), and Schroder ISF Indian Equity ($34 million).

The report also notes that the sell-off in India mirrors patterns seen after the October 2024 US election result, when a Trump victory triggered a wave of EM selling. The latest pullback began after the April 7 announcement of fresh US tariffs, which initially drew inflows to India but have since been overshadowed by global risk-off sentiment.

On the other hand, the US saw massive redemptions from marquee passive vehicles, including $28.5 billion from the BlackRock ACS US Equity Tracker Fund, $5.6 billion from the SPDR S&P 500 ETF, and $1.7 billion from the iShares Russell 2000 ETF. Analysts link the move to a sharp rebound in the US Dollar Index over the past fortnight, which has spurred a coordinated capital shift back to the US and UK.

Emerging markets bore the brunt of this global repositioning, with 86% of EMs experiencing simultaneous outflows. China led the EM outflows at $723 million, followed closely by India ($632 million), Taiwan ($381 million), South Korea ($155 million), and Brazil ($133 million).

Meanwhile, gold saw only modest inflows of $53 million this week, the slowest pace since June, suggesting that investors are not fully rotating into commodities despite the equity outflows.

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