Equity fund inflows dip 61% in Aug, but MF’s AUM at new high

Suresh P Iyengar Mumbai | Updated on September 08, 2021

Mop-up by NFOs made up for outgo in equity plans on profit-booking

Even though the inflow into pure-play equity mutual fund schemes was down 61 per cent in August, the overall Assets Under Management of MFs touched a new high of ₹36.59-lakh crore last month rising from ₹35.32-lakh crore in July, aided by slew of New Fund Offers (NFOs) in the equity and balanced advantage category.

Indeed, five NFOs mopped up a whopping ₹21,414 crore with just SBI Mutual Fund’s Balanced Advantage NFO collecting ₹14,551 crore, according to data released by the Association of Mutual Funds in India on Wednesday.

However, the inflow into the pure-play equity schemes was down 61 per cent at ₹8,776 crore last month against ₹22,584 crore in July as investors used the bull run to book profits.

Flexi-cap funds saw the highest inflow of ₹4,741 crore followed by focussed and thematic funds getting ₹3,072 crore and ₹1,885 crore, respectively, last month. Four NFOs in equity funds mopped up ₹6,863 crore.


Hybrid funds

The net inflow in hybrid funds was down four per cent at ₹18,706 crore against ₹19,481 crore in July despite Balanced Advantage collecting ₹16,571 crore.

Kavitha Krishnan, Senior Analyst, Morningstar India, said though the rising equity market encouraged a lot of investors to turn towards mutual funds, the inflow was lower month-on-month due to profit booking.

Inflows through SIP also hit an all-time high of ₹9,923 crore against ₹9,609 crore in July. The industry opened 24.92 lakh new SIP accounts last month. The SIP Assets Under Management were up five per cent at ₹5.26-lakh crore.

NS Venkatesh, Chief Executive, AMFI, said retail AUM consisting of equity, hybrid and solution oriented at ₹17.15-lakh crore accounting for almost half the total industry asset reflects the trust reposed by retail investors in mutual funds.

Aashwin Dugal, Co Chief Business Officer, Nippon India Mutual Fund, said the net sales of equity funds so far this year have touched ₹1.20-lakh crore with lower yields in debt instruments and flat returns in gold.

Fintech firms’ contribution to a number of SIPs has trebled, though two-thirds is still contributed by traditional channels, he added.

Inflows into debt fund were lower at ₹1,074 crore against ₹73,694 crore due to outflow of ₹11,808 crore from overnight fund and ₹7,407 crore from low-duration funds.

Gautam Kalia, Head (Investment Solutions), Sharekhan, said that after seeing good inflows in July, corporates seem to be losing faith in debt funds due to lower returns with long-term corporate money shifting to arbitrage funds.


Published on September 08, 2021

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