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Fund flows in December 2023. Listed funds witnessed inflows of US$2 bn, completely led by ETF inflows. Indiadedicated funds witnessed inflows of US$3.1 bn, broken down into US$2 bn of ETF inflows and US$1.1 bn of nonETF inflows, whereas GEM funds saw US$247 mn of outflows, led by US$337 mn of non-ETF outflows, offset by US$90 mn of ETF inflows.

• Emerging market flows. Listed emerging market fund flows were mixed. South Korea, Indonesia and Taiwan witnessed US$3 bn, US$262 mn and US$76 mn of outflows, respectively. China, India and Brazil saw US$10.8 bn, US$2 bn and US$186 mn of inflows, respectively. Total FPI and EPFR activity showed divergent trends for Indonesia, South Korea and Taiwan.

• Country allocations. Allocations to China and India constitute 45% of the average Asia ex-Japan fund portfolio. Asia ex-Japan funds’ allocations to India increased to 19.2% in December from 18.7% in November, whereas allocations to India by GEM funds increased sharply to 17.5% in December from 16.6% in November. Allocations by Asia ex-Japan non-ETFs to India increased to 19.7% in December from 19.2% in November; allocations to India by GEM non-ETFs increased to 15.9% in December from 15.1% in November

Product description and methodology. KIE’s foreign fund flow tracker gives a comprehensive view of the market flow by listed funds into India and its emerging market (EM) peers. These market participants are further classified based on their investment styles—passive (ETFs) or active (non-ETFs)—in an attempt to understand the intent and sentiments governing the flow. Please note that there is a difference between EPFR-reported fund flows and FPI flows reported by NSDL. EPFR fund flow data primarily tracks mutual funds, ETFs, closed-end funds and variable annuity funds/insurance-linked funds, whereas NSDL-reported FPI flows also capture investments from hedge funds, proprietary desks and sovereign wealth funds.