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Buckling under heavy redemption pressure, equity schemes of mutual funds logged a net outflow for the second month in a row in August on the back of profit-booking.
Investors redeemed ₹18,558 crore from various equity schemes, while fresh inflow was at ₹14,558 crore, leading to a net outflow of ₹4,000 crore in August, as per data released by the Association of Mutual Funds in India.
Equity schemes of mutual funds registered an outflow of ₹2,489 crore in July for the first time in over four years. Assets under equity fund management were up 4 per cent last month at ₹7.69 lakh crore (₹7.39-lakh crore).
Inflows through the Systematic Investment Plan also continued the downtrend last month to ₹7,791 crore against ₹7,830 crore logged in the previous month.
The number of new SIPs registered was at 11.13 lakh, while those that were closed or matured was at 7.58 lakh, taking the overall active SIP accounts to 3.30 crore.
G Pradeepkumar, CEO, Union AMC, said some of the equity investors have taken a tactical asset allocation call to move from equity to low duration or ultra short-term funds with an objective to re-enter later.
Interestingly, hybrid funds also logged an outflow of ₹4,819 crore, led by balanced and arbitrage funds, which saw a net outflow of ₹2,355 crore and ₹2,545 crore, respectively.
NS Venkatesh, CEO, Association of Mutual Funds in India, said equity investors are expected to re-enter the equity market in December as trend in economic revival becomes clearer.
Debt funds
Debt funds recorded an outflow ₹3,908 crore, with ₹10,298 crore moving out from overnight funds and ₹15,814 crore from liquid funds. The overall AUM of mutual funds increased marginally to ₹27.49-lakh crore against ₹27.11-lakh crore in July.
Himanshu Srivastava, Associate Director, Morningstar India, said the ETF segment gained traction and received a net inflow of ₹1,722 core; , investors are turning their focus on ETFs as many actively-managed funds are struggling to outperform the benchmark indices, he said.
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