Asia is a high-growth market but GEM outflows could weigh on India: Cameron Brandt

Brandt highlighted the negative impact of increasing outflows from the Global Emerging Markets space on India. This weighs on India as it receives nearly 8 to 10 percent of the average portfolio allocation.

Cameron Brandt of EPFR Global shed light on the contrasting fortunes of Asian and Indian markets as major Asian markets continue to attract increasing week-on-week flows compared to the trickling foreign outflow in Indian equities.

The physical distance from the Russia-Ukraine war paired with tension flaring up in the Middle East paints Asia in the best light given its relative high growth, said Brandt in a recent interview with CNBC-TV18.

He believes most Asian markets are well placed in terms of inflows as they remain distanced from troubled spots and are still at good valuations.

However, Brandt highlighted the negative impact of increasing outflows from the Global Emerging Markets (GEM) space on India as it receives nearly 8 to 10 percent of the average portfolio allocation.

He stated that most European markets are bleeding and there could be increasing outflow from emerging equities.

Though he still clubs India in the safe space with Indian funds attracting flows, their momentum is not on the high side.

“We are seeing continued broad interest in Asia, though the intensity of flows into dedicated India funds is not quite what it has been," he said.

Brandt believes that as we approach the year end, investors will ensure allocation to outperforming markets rather than fret about respective market over-valuation.

The market veteran pointed out that even though there is concern related to an expected spike in US yields, several institutional and retail investors are still making up lost ground.