The growing investor tilt toward passive vehicles is reshaping foreign portfolio trends in India and other emerging markets. According to data from Kotak Institutional Equities (KIE), the ETF segment alone attracted $2.4 billion in June, effectively offsetting the $1 billion in outflows from actively managed non-ETF funds.
India Top Destination For Foreign Capital
In June 2025, India emerged as one of the top destinations for foreign capital. It recorded net inflows of $1.4 billion into listed funds and marked the second consecutive month of positive fund flows. As per the data analysed by Kotak Institutional Equities.
India Second-Highest Recipient Of Foreign Capital
India was the second-highest recipient of foreign capital among emerging markets in June, trailing only South Korea ($1.9 billion). Other major inflow recipients included Brazil ($1.2 billion) and Taiwan ($1 billion). China stood out as the only major market to report net outflows, with investors pulling out $36 million. This shows continued caution around the world's second-largest economy.
Net Inflows into Listed Funds
India-focused listed funds recorded inflows of $1.4 billion in June. This was driven by ETF inflows of $2.4 billion, which outweighed the $1 billion in outflows from non-ETF (actively managed) funds. India-Dedicated Funds saw total net inflows of $726 million, with $633 million coming from ETFs and $93 million from non-ETFs.
