India-Focused Funds Show Early Signs of Recovery

Global Industrial funds recorded negative rolling four-week flows for first time since AI trade began in May last year. Technology funds continue to attract the strongest inflows, reaffirming that investors continue to favour direct AI beneficiaries over the wider AI supply chain.

Gold funds recorded largest weekly inflow since mid-April, while Silver fund flows continued to stabilise after several months of heavy redemptions, said the report.

On the other hand, consumption funds had taken the biggest hit in this round of AI investments with consistent outflows since November 2025 although pace of redemptions has eased in recent weeks.

With the emerging market (EM) Index correcting 10 per cent from its peak, investors have started selectively buying the dip. GEM funds attracted another $1.9 billion this week after $1.8 billion in the previous week, taking the two-week inflow to $3.7 billion and reversing 28 per cent of the $13 billion redeemed over the preceding ten weeks.

At the same time, US equity funds witnessed another modest outflow of $6 billion, marking the third week of redemptions in the last five weeks, suggesting that some of the exceptional inflow momentum into US equities has started moderating following the SpaceX listing, said the report.

While foreign fund flows into Taiwan and S Korea continue to cool, domestic investors remain aggressive buyers of the correction. Taiwan domestic funds recorded their second-largest weekly inflow at $4.8 billion, with the previous record also occurring immediately after the June market correction.