India Strategy : Foreign fund flow tracker by Kotak Institutional Equities

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July 2025 fund flow trends showed listed funds receiving $842 million in net inflows, driven by $1.6 billion ETF investments that countered $759 million in non-ETF withdrawals. Global emerging market (GEM) funds attracted $820 million, buoyed by $881 million ETF inflows despite $61 million non-ETF outflows. India-focused funds experienced net outflows of $301 million ($298 million ETF inflows versus $599 million non-ETF outflows).

* Emerging market performance. Most emerging markets recorded positive fund flows. China led with substantial inflows of $4.3 billion, followed by Taiwan ($1.3 billion), South Korea ($1.2 billion), and India ($842 million). FPI and EPFR data mirrored this pattern for South Korea, Taiwan, and Thailand.

* Regional allocations. China and India jointly represent 40% of typical Asia ex-Japan fund portfolios. India’s allocation in Asia ex-Japan funds dropped significantly to 15.1% in July from 16.3% in June, while GEM fund allocations decreased to 17.5% from 18.7%. Non-ETF allocations also declined – Asia ex-Japan funds reduced India exposure to 16.9% from 18.4%, and GEM non-ETFs decreased to 15.6% from 16.7%.

Methodology overview. The KIE foreign fund flow tracker provides complete visibility into listed fund movements across India and emerging markets, differentiating between passive (ETF) and active (non-ETF) strategies to analyze investment motivations. Note that EPFR data (tracking mutual funds, ETFs, and institutional products) differs from NSDL’s FPI reporting (which includes hedge funds, sovereign wealth funds, and proprietary investments).

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