US investors increased their exposure to Indian equities between September 2013 and December 2015, even as they reduced their investments in Chinese stocks during the period. By the end of 2015, 1.8 percent of US foreign equity holdings was in Indian stock markets, as against 1.6 percent in China, according to US Treasury data.
In absolute terms, direct investment in Indian stocks by US investors rose to $12 billion as of December 2015, up from $7.2 billion as of September 2013. During the period, their investments in Chinese equities declined from $12.8 billion to $11.1 billion, said Kotak Institutional Equities in a note, citing the US Treasury data.
However, India's overweight position in the overall emerging markets (EM) portfolio of US investors has reduced between January 2015 and January this year.
"From a peak of 5.2% (January 2015), the over-allocation into India by active funds has come down to 3.7% in January 2016," said Kotak Institutional Equities.
The decline is in line with the overall fall in US investors' equity exposure to EMs over a six-year period between December 2009 and December 2015. The equity allocation dropped to 12 percent as of December 2015 from a peak of 18 percent as of December 2009.
The allocation to developed markets also fell to 54 percent from 61 percent during the six-year period.
