Experts, noted the Business Standard, attribute this to underperformance by Indian stocks compared to their global peers.
New Delhi: With Indian equities lagging global peers, high-net-worth individuals and family offices are increasingly diversifying overseas through portfolio management services (PMSs) and alternative investment funds housed in Gujarat International Finance Tec-City (GIFT City).
As reported by the Business Standard, as of June, investments into foreign jurisdictions stood at $1.43 billion, nearly 70% higher than in March. PMS assets in GIFT City jumped 24% year-on-year to $4.6 billion in Q2FY25.
Experts attribute this to underperformance by Indian stocks compared to their global peers. The MSCI Europe index surged 26% in the first eight months of 2025, compared to MSCI India’s modest 2% rise.
“Developed-market companies are growing faster than India comps at similar valuations,” Saurabh Mukherjea of Marcellus Investment Managers told the Business Standard, adding that $200-300 million is expected to flow into outbound investment structures in the next year.
Industry exectives say PMS players are using this window to diversify client portfolios through global allocations, without exhausting the $250,000 Liberalised Remittance Scheme limit.
Mutual fund net inflows cool off after July surge
Back home, mutual fund flows softened in August, though overall appetite remained intact.
According to a report by the New Indian Express, net inflows into equity schemes dropped 22% month-on-month to Rs 33,430 crore after July’s unusually high inflows, which had risen 80% sequentially to record levels.
August marked the 54th straight month of positive equity flows, “underlining consistent investor appetite”, per the newspaper.
Systematic investment plans slipped marginally – down 1% to Rs 28,265 crore – but remain the preferred retail route. Sectoral and thematic funds, which had seen record allocations in July, saw moderation in new investment.
Open-ended debt funds witnessed sharp outflows of Rs 7,980 crore, primarily due to redemptions in liquid funds, the newspaper cited analyst Nehal Meshram as saying.
Interestingly, gold exchange-traded funds continued to shine, with net inflows of Rs 2,190 crore, extending a four-month positive streak and underscoring the metal’s appeal as a hedge amid global uncertainty.
Fund managers see the moderation as a breather rather than a red flag, TNIE reported.
This article went live on September fourteenth, two thousand twenty five, at thirty minutes past one at night.
The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.