Active Offshore Funds See Inflows Amid Market Uncertainty

India-focused active offshore funds have seen inflows despite market uncertainty and an earnings slowdown. Foreign investors have shown confidence in these funds, preferring them over ETFs due to their potential to outperform the market. The total asset base of these funds increased slightly from $102.3 billion in June 2024 to $103.4 billion in December 2024.

Invesco India Equity C $USD AD attracted the highest net inflows, followed by GS India Equity I Inc $USD and HSBC India Infrastructure Equity Open Fund. However, the iShares MSCI India ETF saw net outflows.

The Indian equity market experienced volatility in the second half of 2024, with strong rallies and sharp corrections. Despite this, active offshore funds recorded net inflows of $4.6 billion in the second half of the year.

Investors are willing to pay higher fees for actively managed funds, viewing them as a safer bet in volatile conditions.