Mumbai, July 8

Inflows into equity mutual fund schemescontinued its downtrend with investments in June dropping 16 per cent to ₹15,497 crore against ₹18,529 crore in May.

The asset under management of equity schemes also fell to ₹12.86-lakh crore against ₹13.31-lakh crore registered in May largely due to mark-to-market loss, according to data released by the Association of Mutual Funds in India (AMFI) on Friday. However, inflows into all the equity schemes were positive which reinforced retail investors interest in equity investment through mutual funds.

Flexi and large cap funds registered the highest net flow of ₹2,512 crore (₹2,939 crore) and ₹2,130 crore (₹2,485 crore). Large and mid-cap and standalone mid-cap funds received inflows of ₹1,995 crore (₹2,414 crore) and ₹1,852 crore (₹1,832 crore).

Kavitha Krishnan, Senior Analyst, Morningstar India, said despite global economic concern retail investors continued to place their confidence in equity-oriented funds and made opportunistic use of the fall in the markets. The decline in the prices of bitcoins and ethereum, a relatively lower return offered in other traditional investment products and an increased awareness towards long-term investing among investors have attracted continuous flow into equity schemes, she added.

Hybrid schemes

Hybrid schemes registered a net outflow of ₹2,279 crore (inflow of ₹5,123 crore) largely due to outflow of ₹5,593 crore from arbitrage funds. Balanced advantage and aggressive hybrid funds recorded an inflow of ₹1,790 crore ( ₹2,248 crore) and ₹1,130 crore (₹1,380 crore).

Inflows through systematic investment plan dipped to ₹12,275 crore (₹12,286 crore) and its AUM dipped to ₹5.51-lakh crore (₹5.65-lakh crore).

Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC, said SIP contribution remaining above ₹12,000 indicates better awareness among retail investors about long-term orientation of equity investments and understanding of current volatility as a part and parcel of equity investing. 

Debt funds see outflows

Outflow from debt funds increased to ₹92,248 crore (₹32,722 crore) as the sector was jolted by the increasing interest trend and pull out by corporates to pay advance tax for the June quarter. The overall outflow from mutual fund industry increased to ₹69,853 crore against ₹7,533 crore in May and AUM was down at ₹35.64-lakh crore in June ( ₹37.22-lakh crore).

NS Venkatesh, Chief Executive Officer, AMFI, said quarter-end phenomena is playing out where corporates redeem their debt investments for advance tax payments and banks wanting to avoid capital charge enforced by RBI. Hopefully, by July and August, the industry would see a different picture on debt scheme flows, he added.

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