Global gold funds recorded their first net inflow of $317 million in three months, while India-focused equity funds faced $9 billion in outflows year-to-date. Investors are shifting focus as the broader artificial intelligence theme loses its previous momentum.
Global gold exchange-traded funds and mutual funds have finally seen a change in sentiment, recording a net inflow of $317 million. This development follows a challenging period where these funds saw nearly $14 billion in total outflows over the previous three months, according to data from Elara Securities. This return to inflows suggests that the selling pressure on precious metals, which had been high as investors booked profits after a price surge earlier this year, may be starting to settle.
While gold is seeing renewed interest, the situation for India-focused funds remains difficult. Investors have pulled out $9 billion from these funds since the beginning of 2026. This total includes $7 billion from long-only funds and $2 billion from exchange-traded funds. To put this in perspective, approximately 60% of the money that entered India-focused long-only funds between March 2023 and October 2024 has now been withdrawn. This $12 billion in total redemptions from that specific pool of money reflects a significant cooling in investor confidence.
Where the Selling is Coming From
The exodus from India-focused funds has been widespread across global investor hubs. Luxembourg saw the highest level of withdrawals at $3.5 billion, followed by the United States at $2.4 billion and Japan at $2.1 billion. In contrast, funds domiciled in Ireland remained largely stable and did not see the same scale of selling. This geographical breakdown highlights that the pressure is coming from major institutional investor bases rather than a single region.
Shifting Global Investment Themes
The broader trend of investing in artificial intelligence is also changing. Investors are becoming much more selective, moving away from broad exposure to the AI ecosystem. Global Emerging Market funds, often used to bet on companies linked to the AI supply chain, have now seen outflows for ten weeks in a row. While these redemptions have slowed down to $46 million, the enthusiasm that drove earlier record inflows into this space has clearly faded. Instead, investors seem to be concentrating their bets on a smaller group of companies that are direct beneficiaries of AI development.
In other parts of the market, US equity funds experienced a strong recovery, drawing in $27 billion in a single week and wiping out the losses from the previous two weeks. European markets also saw a small boost with an inflow of $376 million. Investors should keep a close watch on whether the current interest in gold remains consistent or if it is merely a temporary pause in a wider exit from emerging markets. Tracking the monthly data on foreign institutional flows will be important to see if the pace of redemption in India-focused funds continues or begins to moderate.