Nomura, Fidelity, Jupiter's India-focused funds see sharp redemptions as FIIs sell-off

Foreign investors have been redeeming their active India-focused holdings since 2025.

India-dedicated funds witnessed a significant outflow of $289 million last week, the largest single-week redemption since April 2025. While $167 million was pulled out from ETFs, $122 million was withdrawn from long-only active funds such as ABSL Umbrella and Jupiter India Select SICA, noted Elara Capital.

On the positive side, modest inflows were observed in funds like SMAM High Growth, Ashoka WhiteOak, and Kotak Midcap, although most of these too posted negative returns for the week.

Further, around 65 percent of all India-focused funds have been seeing redemptions since January 2025.

These funds saw strong inflows over 2023 and 2024, with the reversal in sentiment starting from October 2024, after Dalal Street hit its peak. Jupiter Fund Management, Nomura Holdings, and Fidelity are the AMCs that have seen the sharpest redemptions from their India-focused funds.

Additionally, after recording healthy returns last year, the year-to-date (YTD) returns have moderated or turned negative for many funds, as investors reassess India’s near-term outlook. The tilt towards ETFs and the uneven performance across active funds highlight rising caution and portfolio repositioning underway, noted Elara Capital.

This marks a similar trend that played out in 2018. The brokerage noted that the last major phase of investor euphoria in India-focused active funds peaked in January 2018, when assets under management (AUM) touched $47 billion.

This was followed by a steep 60 percent decline in AUM, bottoming out by March 2020. A strong recovery phase began in March 2023 at $28 billion, with AUM surging to $70 billion by September 2024, which marked a near full reversal of the earlier outflows.

"However, recent data suggests another round of AUM decline may be underway. Notably, the $22 billion of net redemptions between 2018–2022 have almost entirely been redeployed over 2023–2024," added the brokerage.

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