Martin Emery of GMO examines whether the recent pickup in foreign equity flows to India marks a structural shift or a temporary response to sentiment and market dynamics.
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Despite a rebound in flows since April, India remains a short in GMO’s Systematic Global Macro Strategy due to stretched valuations and muted investor sentiment.
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Foreign allocations have historically tracked momentum and risk appetite—both of which remain unfavourable in the current environment.
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GMO’s models continue to project underperformance relative to other EMs, citing elevated profit margins and modest return expectations.
For a closer look at the disconnect between capital flows and fundamentals, read the full analysis.
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