See hot money flows into India; long-only funds still wary

See hot money flows into India; long-only funds still wary: EPFR

The long only funds into India are still cautious but the tide is slowly beginning to turn encouraged by recent Budget, says Cameron Brandt, Director-Research, EPFR Global.

The fund flows that are coming into India are purely hot money as of now is the word coming in from Cameron Brandt, Director-Research, EPFR Global, adding that one has seen an inflection point with respect to money moving back into emerging market funds. 

The long only funds into India are still cautious but the tide is slowly beginning to turn encouraged by recent Budget. However, they are still waiting for Modi’s reforms to bear fruit for more conviction and so are moving very slowly, says Brandt. 

However, he expects India to do well this year in terms of fund flows on back of good tailwinds from cheaper oil, stable monetary policy, no negatives from global trade etc. Globally, the share of gold funds is slowly ebbing and going into diversified funds. Investors are buying into commodities which have now become cheap, says Brandt. 

The mutual funds too are testing the premise the energy sector, he adds. According to Brandt, the initial reaction after the European Central Bank (ECB) rate cut was quite positive because it showed that the Central Bank is opening up its coffers to the banking system and assuring that any problems in the system will not be allowed to get out of hand, says Brandt.

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Source:Moneycontrol.com