Listed foreign funds pull out $332 mn in June

India witnessed an outflow of USD 332 million from listed foreign funds in June, taking the total to more than USD 2 billion this year.

"Listed fund flows to India recorded outflows worth USD 0.33 billion in June as EM ETFs offset active fund redemptions (USD 0.66 billion) seen during the month. For calendar year 2016, India saw listed fund flows worth USD 2 billion," said a Kotak Institutional Equities report.

The listed funds -- passive exchange-traded funds (ETFs) and active non-ETFs -- generally account for a large part of foreign portfolio investor (FPI) activity in India.

Indian market witnessed inflows worth USD 327 million in ETFs while non-ETFs pulled out USD 659 million during the period.

The report, which offers a comprehensive view on fund flows of listed funds into India and other emerging markets, said listed funds did not contribute to the FPI inflows in June.

Despite the listed funds outflow, the FPI activity in the region remained upbeat as other participants remained active, it added.

"Net FPI activity continues to remain positive on the back of other participants, especially sovereign wealth funds (SWFs) whose share in FPI assets under custody exceeds 10 per cent now," it added.

The report said that India dedicated funds witnessed an outflow last month, while funds focused on emerging markets (EM) saw inflow.

A total of USD 280 million was pulled out from India- -dedicated funds in June and EM-based funds saw inflow to the tune of USD 143 million.

"Active EM funds continue to see redemptions even as ETF activity remains predominantly positive from an Indian context," the report said.