Money & Banking

Equity inflows into mutual funds dip to 41-month low

Suresh P Iyengar Mumbai | Updated on December 09, 2019 Published on December 09, 2019

Exit load triggers outflow, but analysts see investors flocking back

Inflows into equity schemes of mutual funds plunged 78 per cent to a 41-month low in November to ₹1,312 crore against the ₹6,026 crore logged in October, despite the markets hitting a new high.

Among equity schemes, multi-cap funds logged the biggest fall of 86 per cent to ₹181 crore from ₹1,312 crore, while mid-cap funds plummeted 26 per cent to ₹802 crore (₹1,091 crore), according to data released by the Association of Mutual Funds in India.

Large- and mid-cap funds saw an outflow of ₹252 crore against inflows of ₹510 crore in October, while sector-specific investments witnessed an outflow of ₹637 crore against inflows of ₹447 crore registered in October. Outflows from the value and contra fund deepened to ₹956 crore from ₹229 crore logged in October.

Exit load takes a toll

Inflows into debt-oriented schemes also slowed down sharply, by 58 per cent, to ₹51,428 crore (₹1.21- lakh crore) as inflows into liquid funds plunged 92 per cent to ₹6,938 crore (₹93,203 crore) due to SEBI’s introduction of an exit load.




However, inflows into overnight funds improved to ₹20,649 crore (₹5,748 crore). Outflow from credit risk fund touched ₹1,899 crore (₹1,382 crore). The overall inflow into debit-oriented schemes dipped 59 per cent to ₹54,419 crore (₹1.33 lakh crore).

However, the assets under management of the mutual fund industry improved 3 per cent to ₹27.04-lakh crore in November from ₹26.32-lakh crore, largely due to steady inflows through systematic investment plans and the run-up in the equity market.

SIP inflows touched a new high of ₹8,273 crore (₹8,246 crore) last month. The SIP AUM touched an all-time high of ₹3.12-lakh crore (₹3.03-lakh crore).

NS Venkatesh, CEO, AMFI, said that with markets touching a new high, some high-net-worth investors booked profits, leading to a slowdown in equity flows.

Expecting these investors to reinvest at the current level, he said they should take a call on reinvesting soon as the markets are poised to touch new highs with expectations from the Union Budget building up and the impact of government reforms kicking in.

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Published on December 09, 2019
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