The asset under management of mutual funds hit another new high of ₹36.74 lakh crore last month, on the back of record inflow through systematic investment plan, which crossed the ₹10,000-crore mark for the first time ever. AUM in August stood at ₹36.59 lakh crore.

Net equity inflow was up marginally at ₹8,678 crore (₹8,667 crore), registering the seventh consecutive month of net inflows, according to Association of Mutual Funds in India data released on Friday. Since March, equity funds have received a net inflow of ₹68,551 crore, indicating positive sentiment among investors.

Record SIP folios

Investments through SIP were up at ₹10,351 crore against ₹9,923 crore logged in August as mutual funds widened their reach to beyond the top 30 cities through digital initiatives. The industry opened a record new SIP folios of 26.79 lakh in September. The SIP asset under management was up three per cent at ₹5.45 lakh crore (₹5.27 lakh crore).

NS Venkatesh, Chief Executive, AMF,I said retail investors are preferring mutual funds over low-yielding traditional savings avenue on the back of rapidly improving economic scenario aided by conducive RBI policy and easing of Covid related restrictions.

The multi-cap and thematic funds registered an inflow of ₹3,569 crore and ₹2,618 crore while flexi cap and mid-cap funds attracted investments of ₹2,009 crore and ₹1,351 crore.

NFOs contribution

Five equity-oriented NFOs have garnered ₹6,579 crore contributing significantly towards the net inflows while NFO of two passive funds and four close-ended debt funds have raised ₹1,211 crore and ₹493 crore

Himanshu Srivastava, Associate Director, Morningstar India, said the secular bull run in the markets and high returns has attracted several investors to equity mutual funds. Relatively lower returns from traditional investments have also made equity mutual funds an attractive investment destination for investors, he added.

As expected, inflows into hybrid funds plunged to ₹3,588 crore against ₹18,705 crore in August when the NFO of SBI Balanced Advantage Fund alone attracted investment of ₹14,500 crore.

Debts see outflow

Debt funds witnessed a net outflow of ₹63,910 crore against an inflow of ₹1,074 crore as corporates pulled out money to meet their advance tax payment. Liquid and money market funds saw the highest net outflow of ₹48,379 crore and ₹16,609 crore followed by ₹10,909 crore and ₹8,433 crore from Ultra Short Duration and Money Market. Gautam Kalia, Head – Investment Solutions, Sharekhan, said debt funds saw maximum outflows after registering subdued inflows in previous months and is no longer an attractive investment option for the investors.

Aashwin Dugal, co-Chief Business Officer, Nippon India Mutual Fund, said net outflows from the debt category were partly due to a section of institutional investors who exit MFs at the end of every quarter. Some high net worth investors redeemed from short to medium debt funds in anticipation of Monetary Policy announcements which could impact bond yields. These flows are expected to come back over the course of the quarter as bond markets get a direction post policy announcement, he added.