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Inflow into mutual fund equity schemes dipped to a 21-month low of ₹2,258 crore last month against ₹9,390 crore in October as investors continued to book profit on the relentless rally in the market despite global headwinds.
Equity schemes have been registering healthy inflows in the last few years except for the net outflow of ₹4,534 crore logged in February 2021.
Large cap funds recorded a net outflow for the first time in 21 months at ₹1,039 crore last month against an inflow of ₹174 crore in October as valuations of top companies hit a new high. In February 2021, the net outflow from large cap schemes was at ₹1,280 crore.
Other equity schemes that registered a net outflow last month include flexi cap, focused fund and equity schemes at ₹863 crore, ₹254 crore and ₹254 crore against an inflow of ₹465 crore, ₹260 crore and ₹386 crore in October, respectively. Hybrid schemes registered a net outflow of ₹6,477 crore led by massive outflow from arbitrage and balanced advantage funds. Passive funds recorded an inflow of ₹10,394 crore last month.
SIP contribution
Melvyn Santarita, Analyst, Morningstar India, said investors have been allocating money to mid- and small-cap funds given the sharp fall in this segment over the last year. Inflows through SIP hit a new high at ₹13,306 crore (₹13,040 crore) and SIP assets were up at ₹6.83-lakh crore (₹6.65-lakh crore).
Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC, said the robust SIP contribution reflects retail investors’ mentality to look past short-term trends and focus on long-term fundamentals to create wealth through equity investments. Investors now have an understanding of seeing short-term volatility as a part and parcel of equity investing, he added.
Debt funds recorded a net inflow of ₹3,669 crore largely supported by investments of ₹34,276 crore in liquid schemes. With an overall inflow of ₹13,264 crore, the mutual fund industry’s assets touched a new high of ₹40.38-lakh crore.
NS Venkatesh, Chief Executive, AMFI, said the outflow from the retail schemes was due to investors encashing profits to meet their immediate needs amid festival season. “We believe the upcoming Budget will bring cheer to the market and lead to increased inflow in equity markets, though debt funds have to wait till RBI’s rate hike cycle ends by next April,” he added.
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