The total asset value of the Federal Retirement Thrift Investment Board is estimated to be $600 billion. As of October 31, 2023, the board has invested approximately $68 billion in the International Stock Index Investment Fund.
Analysts predict that a significant US pension fund would inject about ₹30,000 crore into the Indian equities markets starting in 2024, which might support local stocks.
In order to increase its exposure to foreign markets, the US federal government’s retirement fund has chosen to modify the benchmark equities index. According to analysts, the change may cause a $28 billion market turbulence in worldwide markets, but starting in 2024, India may enjoy inflows of $3.6 billion (more than ₹30,000 crore).
One of the largest US pension funds, the Federal Retirement Thrift Investment Board, has made the decision to move from the MSCI EAFE index to the MSCI ACWI ex-USA and ex-China index.
By 2024, the pension fund will begin modifying the benchmark index, increasing the weight of Indian equities, and perhaps drawing in fresh capital. Analysts state that the pension fund mostly invests in emerging market stocks, excluding China and Russia.
The benchmark index used by the Fund is MSCI EAFE, which includes 21 developed economies in Europe, Asia, Australia, and the Far East. The MSCI EAFE index does not contain India.
Conversely, the MSCI ACWI ex-USA and ex-China include both established and emerging markets.
Thus far in this calendar year, foreign portfolio investors have collectively invested over ₹96,340 crore in Indian stocks, contributing to the benchmark indices Sensex and Nifty reaching all-time highs.
Analysts predict that lowering risk-free returns in the US and increasing risk appetite in developing nations would direct international capital flows toward India.
