Inflows into equity mutual funds continued its downtrend and plunged 43 per cent in July to ₹8,898 crore against ₹15,498 crore in June, as investors used the sudden spike in market to book some profit.

The fresh inflow into equity schemes dipped to ₹22,654 crore (₹27,537 crore) while redemption increased to ₹13,756 crore (₹12,039 crore), according to data released by the Association of Mutual Funds of India (AMFI) on Monday.

Small- and flexi-cap funds received the highest inflow of ₹1,779 crore (₹1,616 crore) and ₹1,381 crore (₹2,512 crore), respectively, while mid-cap funds got investment of ₹1,245 crore (₹1,852 crore). Among hybrid schemes, outflow from arbitrage funds increased to ₹6,408 crore (outflow of ₹5,593 crore).

‘Still early days’

Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC, said equity investors have taken some profit off as markets went up and in fact, excluding SIP numbers, there would have been net negative sales in July. Even the hybrid category has slowed down with dip in gross sales and higher redemptions.

“Though markets are recovering and foreign institutional investors are returning, it is still early days to say whether this trend will continue. But if it does, retail investor confidence will return once again,” he added.

Not a trend yet

Systematic investment plans also saw a marginal dip in inflows to ₹12,140 crore against ₹12,275 crore in June even as the assets under SIP increased to ₹6.09-lakh crore (₹5.51-lakh crore), largely due to mark-to-market gain.

Key market indices had rallied substantially last month with FPIs turning net buyers after nine months on the back of falling crude oil prices. NS Venkatesh, Chief Executive, AMFI, said though SIP inflows have been falling, it cannot be construed as a trend and inflows through this route should be in the ₹12,000-₹13,000 crore range this fiscal.

Debt funds saw a net inflow of ₹4,930 crore (outflow of ₹92,248 crore) largely due to investment of ₹19,919 crore (outflow of ₹20,668 crore) in liquid funds as almost all other schemes registered an outflow except for money market funds. Overall, assets under management of the industry was up at ₹37.75-lakh crore (₹35.64-lakh crore) on sharp rally in equity markets.