India’s FII outflows surged in September, reversing the modest inflow seen in July‑August, as higher oil prices weigh on the country’s import‑heavy economy—Brandt calls the exodus “brutal” and signals a broad investor pullback.
EPFR Global’s Cameron Brandt notes that, despite the turmoil in primary markets, fixed‑income funds across both emerging and developed economies are still pulling in capital, with weekly inflows ranging between $15 billion and $20 billion. This steady flow underscores investors’ preference for bonds amid rising sovereign debt concerns.
In contrast, Korea and Taiwan funds—once buoyed by AI hype—have seen their weekly inflows shrink to around $100 million, a clear sign that the caution is not limited to India but spans many emerging‑market themes.
Meanwhile, Brazil‑focused funds gained traction after the first round of elections, and China mainland‑focused funds remain steady, while precious‑metal funds show a modest, but stable, flow pattern.
Looking ahead, Brandt warns that as oil prices stay elevated, India’s FII outflows are likely to persist, forcing equity investors to remain wary. Bonds, however, appear poised to stay attractive, offering a refuge for capital in the coming weeks.