3 weeks ago
South Korea, Taiwan draw foreign capital as India outflows moderate
Imagine the world is a big money map.
Investors from other countries decide where to put their money.
This year, South Korea and Taiwan are popular places to put money.
They received billions of dollars from foreign investors.
India, on the other hand, has seen some investors take money out.
But the selling in India is getting slower.
Since mid-June, money in India-focused funds has done better than money in other emerging-market funds.
Much of the money moving to Taiwan and South Korea is tied to the AI trade.
AI stands for artificial intelligence, and many investors are excited about it.
Now, experts say the AI trade is getting crowded and may be slowing down.
South Korea led the emerging-market recovery with $3.5 billion in foreign inflows.
Taiwan attracted $1.8 billion in foreign inflows, reaching a 23-week high.
India-focused long-only funds continued to see redemptions, though the pace of selling has moderated.
Since mid-June, India-focused long-only funds have outperformed emerging-market long-only funds by around 10%.
Elara noted the AI trade has become crowded over the past three months and shows early signs of slowing.
- Who
- Foreign investors, global emerging-market (GEM) funds, and India-focused long-only funds, with analysis from Elara
- What
- Global capital flowed into South Korea and Taiwan while India continued to face moderating foreign outflows
- Where
- Emerging markets, chiefly South Korea, Taiwan, India, Brazil and Mexico
- When
- During 2026, with recent flow data including trends since mid-June
- Why
- Investors redirected capital toward the AI trade, particularly in Taiwan and South Korea, while India's selling pressure began to ease
Key facts
- South Korea foreign inflows
- $3.5 billion
- Taiwan foreign inflows
- $1.8 billion (23-week high)
- GEM funds inflow
- $4 billion (six-month high)
- Global industrial funds inflow
- $1.3 billion (seven-week high)
- India-focused long-only funds
- Continued redemptions with moderating pace
- India relative outperformance
- About 10% since mid-June vs emerging-market long-only funds
- AI trade status
- Crowded over past three months; early signs of slowing rotation
Quotes
Elara
Analyst at Elara Capital
“Elara said much of the pressure during 2026 reflected capital being redirected towards the AI trade, particularly in Taiwan and South Korea.”
businesstoday.in










