India-Focussed Offshore Funds, ETFs See $1.4 Billion Outflow In July-September

India-focussed offshore funds and exchange-traded funds witnessed a net outflow of $1.4 billion (over Rs 9,900 crore) in July-September period of this year, making it the sixth consecutive quarter of withdrawal, a report has said.

India-focussed offshore funds and exchange-traded funds are a subset of the overall foreign portfolio investor flows.

Of the total outflows during the quarter under review, $1 billion was from India-focussed offshore funds, while $321 million was from India-focussed offshore ETFs, Morningstar Offshore Fund Spy report said.

In the previous quarter, the net outflow from offshore funds and ETFs was $941 million. Over the last one year period ended September 2019, the category has witnessed net outflows of $5.2 billion, it added.

India-focussed offshore funds and ETFs registered outflows for the sixth consecutive quarter.

During June 2018 quarter, the net outflow was pegged at $2,218.48 million, while it was $1,840.46 million in September 2018 quarter, $1,459.90 million in December 2018 quarter, $1,407.92 million in March 2019 quarter and $941.49 million in June 2019 quarter.

"Consistent net outflows dented the asset base of India-focussed offshore funds and ETFs. During the quarter, their assets fell to $49.1 billion from $52.9 billion recorded in the previous quarter," the report said.

As per the report, all three segments -- large-cap, mid-cap and small-cap -- performed negatively during the quarter ended September.

The S&P BSE Sensex was down 1.85 percent in September quarter, while S&P BSE Midcap and S&P BSE Smallcap indices were down 4.76 percent and 7.50 percent, respectively.

The value of investment into Indian equities in foreign funds fell to an estimated $179 billion during the quarter ended September 2019 against $189 billion recorded in the previous quarter.

All three categories -- global, emerging market and Asia/Asia-Pacific -- of regionally diversified equity funds and ETFs turned out to be net sellers of Indian equities for the quarter under review, it said.