India inflows hit six-month high as global emerging markets momentum lifts sentiment

GEM funds continued to outperform. The category has maintained consistent inflows since April 2025, absorbing $34 billion over the period.

India saw an improvement in foreign portfolio flows this week, with overseas investors bringing in $414 million, the highest in six months and a sharp reversal from the muted trend of recent weeks, according to Elara Capital’s Global Liquidity Tracker. The rise was driven by renewed allocations into global emerging market (GEM) funds, which continued their exceptionally strong run, while India-focused funds contributed $63 million. All focused inflows into India came through exchange-traded funds totalling $110 million, even as active funds logged their fourteenth straight week of redemptions, pulling out another $46 million .

Flows from US-domiciled funds were the strongest at $82 million, followed by $27 million from Luxembourg-based funds. Japan-domiciled funds, however, extended their prolonged weakness with a twentieth consecutive week of outflows, the report showed.

US equity fund flows, meanwhile, lost considerable momentum. Weekly inflows fell sharply to a three-month low of $1.7 billion, far below the $16 billion average seen over the past 12 weeks. The report notes that outright redemptions have not returned since the week ended 10 September—triggered by President Donald Trump’s renewed tariff threats on China—but investor appetite has visibly cooled in recent weeks .

In contrast, GEM funds continued to outperform. The category has maintained consistent inflows since April 2025, absorbing $34 billion over the period. According to the report, flows remained strongest into China, South Korea, Taiwan, and Brazil, underscoring a clear divergence in global allocation trends as US momentum moderates while emerging markets accelerate .

Sector flows were mixed during the week. EM Technology funds recorded $830 million outflow, ending a ten-week spell of inflows totalling $30 billion. Commodity equity funds returned to positive territory with $360 million in fresh allocations, reversing a five-week phase of profit-taking that had drained $3.5 billion. Precious metal funds extended their recovery with an additional $5 billion in inflows this week and $17 billion over the past month, while physical commodity funds posted their strongest inflow in six weeks at $3.7 billion.

The report added that the broader uptrend in commodity-related allocations remains intact, supported by the Global Metals & Mining Index (excluding gold and silver) breaking above its 2008 highs, signalling renewed investor conviction in the sector’s long-term trajectory .