Inflows Into Equity Mutual Funds Rise For Fourth Straight Month In August
Net equity mutual fund inflows rose 12.8 percent month-on-month to Rs 9,152.43 crore in August, AMFI data shows.
Inflows into equity mutual funds rose for the fourth straight month in August even as the benchmark Nifty 50 Index posted its worst losing streak in six years.
Net inflows into equity and equity-linked schemes rose 12.8 percent over the previous month to Rs 9,152.43 crore in August, according to data released by the Association of Mutual Funds in India. That’s the highest mutual fund inflows in five months as investors pile into large caps amid uncertainty.
The lobby of mutual fund houses in India started offering granular data of equity inflows since April, according to guidelines of the market regulator SEBI. An analysis of the data shows that the large-cap funds have witnessed the highest inflow in August.
The inflows defied the volatility in the market, which spiked since the budget. The Nifty 50 fell for the third straight month in August, its longest losing streak since August 2013.
“Retail investor interest in equity mutual funds continues to be steady, displaying maturity, despite uncertain economic and volatile market situation,” NS Venkatesh, chief executive officer at AMFI, told BloombergQuint. “Net inflows, especially in small- and mid-cap funds, as also in ELSS segment, signify heightened confidence and interest in emerging businesses and disciplined tax planning.”
Radhika Gupta, chief executive officer at Edelweiss Mutual Fund, agreed. “Despite all the bad news, equity flows at least start with a smile. It’s a good set of numbers,” she told BloombergQuint. “The SIP (systematic investment plan) book at around Rs 8,200 crore has been largely stable. It’s a very good number and across segments the flows have been robust.”
Overall, the mutual fund industry witnessed a net inflow of Rs 102,538.27 crore across all segments as compared with an inflow of Rs 87,088 crore in July. This was primarily driven by the liquid or money market category.
Inflows into liquid funds jumped 75 percent month-on-month to Rs 79,428.2 crore. Companies use these schemes to park cash for the short term.
The balanced funds category saw a net outflow of Rs 879.21 crore, continuing the decline after a month of inflows in July.
Total assets under management of the mutual fund industry fell 0.7 percent month-on-month to Rs 25.63 lakh crore in August. Total equity assets declined 4 percent to Rs 6.79 lakh crore during the period.
In September, according to Venkatesh, while SIPs would continue to witness robust flows, liquid funds may see volatility, owing to quarter-end withdrawals.