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For the first time in over four years, the equity schemes of mutual funds registered an outflow of ₹2,489 crore in July, on the back of huge redemption and negative returns delivered by most schemes. In fact, about 78 per cent of the active equity schemes had given a negative return this year.
In March, 2016 equity funds (including ELSS) logged a outflow of ₹900 crore.
The outflow from equity in July comes after investments in these schemes hit a new low of ₹240 crore in June. Led by an outflow of ₹1,033 crore and ₹579 crore in multi-cap and mid-cap funds, almost all categories of equity funds saw huge redemptions, according to the Association of Mutual Funds in India data.
Other equity funds such as Value Fund and Large and Mid-Cap logged an outflow of ₹549 crore (outflow of ₹136 crore in June) and ₹467 crore (inflow of ₹88 crore).
Interestingly, only two equity schemes Focused Fund, the most riskiest, and Equity-Linked Saving Scheme saw an inflow of ₹535 crore (₹317 crore) and ₹279 crore (₹587 crore), respectively.
Himanshu Srivastava, Associate Director, Morningstar India, said equity-oriented mutual funds witnessed their first major monthly net outflow in a long time as investors booked profit given the surge in the equity markets in the recent times.
Inflow through Systematic Investment Plan continued to fall and was down at ₹7,830 crore (₹7,937 crore). The number of discontinued SIP increased to 7.15 lakh from 6.57 lakh logged in June. However, new SIP opened was higher at 11.32 lakh (9.12 lakh). SIP asset was higher at ₹3.19 lakh crore (₹3 lakh crore).
The equity asset under management of mutual fund industry was up five per cent last month at ₹7.37 lakh crore (₹7.01 lakh crore) largely due to run-up in market amid intense volatility.
NS Venkatesh, CEO, AMFI, said the investments through SIP should remain at the current level as distributors prepare for Covid unlocking and pushing digital reach. Debt Mutual Funds are an attractive proposition, with benign interest rate and fears on Franklin Templeton mishap fading slowly, he added.
Overall, asset under management of mutual funds in July was up at ₹27.11 lakh crore (₹25.48 lakh crore) largely due to inflow into debt schemes.
Debt funds inflows increased to ₹91,391 crore (₹2,862 crore) on the back of sharp inflow of ₹14,219 crore (₹8,324 crore) and ₹14,055 crore (outflow of ₹44,226 crore) in short term and liquid fund categories. Corporate Bond and short term funds also saw an inflow of ₹11,910 crore (₹10,737 crore) and ₹11,510 crore (₹8,323 crore).
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