India-focused offshore funds see outflows in second quarter in CY2012

The total net assets of India-focused offshore funds & ETFs fell by 12% to $33 billion during second quarter of CY2012. According to Morningstar India data, the cumulative assets of all these funds are now down by almost 40% from peak of about USD 54 billion at the end of CY2010. The redemptions from these funds and fall in Indian equities both have led to fall in assets of these funds.

"Sharp depreciation in the rupee, coupled with macroeconomic concerns of a slowdown and ballooning fiscal deficit, weighed on investor sentiments and resulted in outflows during the quarter," observes Dhurva Raj Chatterji, senior research analyst, Morningstar India in his report.

In Q2CY2012, HSBC GIF Indian Equity fund recorded the biggest outflow of USD 206 million among all India focused offshore funds and ETFs. It was among the bottom 10 performing funds during the quarter in the category of India dedicated offshore funds with a loss of 13.82% (in USD terms), compared to a loss of 9.54% returned by the MSCI India NR USD Index.

Aberdeen Global Indian Equity Fund, the largest offshore India fund recorded the highest inflow of $247 million during the second quarter. It was among the top 10 performing funds during the second quarter, with a loss of 6.70% (in USD terms).