India-focused funds continue to see redemptions for fifth consecutive week: Elara Capital – Delhi News Daily

India-focused funds experienced outflows for the fifth straight week, but the pace of redemptions eased to $78 million, down from $387 million the previous week and $700 million the week before, according to a report released by Elara Capital.

The report further highlighted that all the redemptions of this week came from ETFs with a total outflow of $220 million, while long-only funds posted their first inflow in seven weeks of $140 million, led by HSBC Global Investment Funds and Ashoka WhiteOak ESG Funds.

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“Still, this marks the weakest phase for India flows since the large sell-off between Oct’24 and Mar’25, when $4.4bn was pulled out. In the current cycle, beginning Jul’25, outflows from India total $1.9bn, much of which has been redirected to China,” the report stated.

The report highlights that investors have been increasingly preferring globally mandated funds, which provide diversified exposure across regions amid heightened uncertainty in global markets following Trump’s victory.

Globally mandated funds remain the only category witnessing strong inflows, as most country-specific funds continue to see muted activity, except a modest recovery in China and Hong Kong flows (partly at India’s expense)

“Historically, a rebound in global funds has signalled heightened uncertainty, with flows eventually redirected to specific regions once clarity emerges,” the report highlighted.

Since March 2025, around 45% of the total equity inflows have been into global mandated funds and the present allocation at US 63%, Japan 5%, UK 3.3%, Canada 3%, China 2.5%, Switzerland 2.3%, France 2.3%, Germany 2.2%, Taiwan 2%, & India 1.7%.

The global high-yield bond funds have witnessed their first outflows in 17 weeks to $127 million. The previous redemption phases in this segment were from November 2024 to December 2024 and March 2025 to 2025, which coincided with the sharp corrections across emerging markets, making such moves an early signal of broader risk-off sentiment, the report mentioned.

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The inflows in gold funds have surged from $3.8 billion to $130 million in one week’s time. On the other hand, in the last 14 weeks, gold funds have witnessed consistent inflows of around $41 billion.