Foreign institutional investors have been seeking direct investments in emerging markets, including India, and an increasing amount of cash is finding its way into ETFs in the country. India’s benchmark equity indices are down 20% year-to-date, but assets under the eight India-dedicated foreign ETFs have been holding up at $3 billion over the year.
“ETFs constitute nearly 7% of the total FII assets in India and by next year this should go up to 9-10%, considering other factors (are) constant,” Kumar added.
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Max Chen contributed to this article.