Global fund flows consolidate across commodities; India sees shift from Active to Passive strategies: Elara

At the country level, flows remain selective. South Korea continues to attract strong inflows, while China is still seeing positive foreign investor flows despite rising domestic selling pressure since the start of the year, the report said.

• India sees shift from active to passive fund strategies this week
• Emerging market funds record $4.3 billion inflows, trend strong
• Commodity flows moderate; silver funds see $1.5 billion outflows

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Global commodity fund flows are showing signs of consolidation, with India witnessing a notable shift from active to passive investment strategies, according to the Global Liquidity Tracker by Elara Capital.

Emerging market (EM) funds recorded $4.3 billion of inflows last week, the report said. While this was lower than the $6.9 billion seen in the previous week and the $11 billion recorded in late January, the broader trend points to a strong start to the year for EM allocations. Global-mandated funds are also seeing accelerated inflows, averaging $15 billion per week since January 26, nearly three times the pace of the preceding six months, Elara noted.

Given that the US accounts for roughly 60 percent of global indices, a significant share of these flows is directed there. Other major destinations include Japan (5.3 percent), the UK (3.4 percent), Canada (3.1 percent) and Taiwan (2.6 percent).

At the country level, flows remain selective. South Korea continues to attract strong inflows, while China is still seeing positive foreign investor flows despite rising domestic selling pressure since the start of the year, the report said.

India-dedicated funds recorded inflows for the third consecutive week, albeit a modest $33 million, following a seven-month high of $217 million in the previous week. However, the improvement was entirely ETF-driven, even as long-only active strategies remained under pressure. India-focused long-only funds saw redemptions of $273 million during the week, and around $835 million shifted from active to passive India strategies over the past five days, according to the tracker.

Commodity flows also showed signs of moderation. Silver funds saw outflows of $1.5 billion, taking cumulative redemptions over the past seven weeks to $3 billion. Gold inflows paused, though without meaningful redemptions. Commodity-equity funds logged their 12th straight week of inflows, but at a slower pace of $595 million, the weakest in 10 weeks. Energy-equity funds extended their inflow streak to nine weeks, adding $381 million during the period. The report said the commodity complex appears to be entering a consolidation phase after nearly nine months of strong momentum, rather than signalling a reversal.

In global emerging market (GEM) funds, India’s allocation in active strategies peaked at 19 percent in August 2024 before declining by 4.5 percentage points, largely in favour of Taiwan and South Korea. China’s allocation has risen marginally by 0.9 percentage points. Over the past four months, India’s allocation has stabilised at around 14 percent, leaving it underweight by 270–280 basis points. By comparison, India’s underweight position stood at around 100–130 basis points during 2021–2022.