Inflows Into Equity Mutual Funds Fall To Lowest In Four Months In October
Contributions through Mutual Fund SIPs remained steady for the third straight month at Rs 8,245 crore in October.
Inflows into equity mutual funds fell to their lowest in four months in October even as India’s stock market rallied for the second straight month.
Net inflow into equity and equity-linked schemes fell 9 percent over the previous month to Rs 6,026.38 crore in October, according to data released by the Association of Mutual Funds in India. That’s also the second straight month of decline.
AMFI started offering granular data of equity inflows since April, according to the guidelines of the market regulator. An analysis of the data shows that inflows have moderated across mutual funds categories in October.
“It’s an interesting situation from the investors’ perspective where they see the markets are at an all-time high, but their mutual fund investment is showing negative returns. The market is skewed in favour of a small faction which has got investors confused and that is reflecting in the flows as well,” Swarup Mohanty, chief executive officer at Mirae Global Investment (India), told BloombergQuint over the phone. “But what is heartening is the continuous inflow of money via the SIP route.”
Contribution through systematic investment plans, or SIPs, remained steady for the third straight month, the data showed.
“SIP AUMs crossing the Rs 3-trillion (Rs 3 lakh crore) landmark for the first time ever and the continual rise in SIP accounts are a positive reflection of disciplined approach adopted by the retail investor fraternity,” NS Venkatesh, chief executive at AMFI, said. “We expect equity markets to perform better in the coming quarters as the positive impact of the government initiatives trickles down in the economy, driving further inflows into mutual funds.”
Overall, the mutual fund industry witnessed the highest net inflow in nearly a year. That compares with an outflow of Rs 1.51 lakh crore in September. The liquid or money market category contributed the most to the total inflows during the reported month.
The schemes used by companies to park surplus cash for the short term witnessed an inflow of Rs 93,202.96 crore in October against an outflow of Rs 1.40 lakh crore in the previous month.
Total assets under management rose 2.1 percent month-on-month to Rs 26.13 lakh crore in October. Total equity assets increased 3.3 percent to Rs 7.25 lakh crore during the period.