Market volatility impact inflows into equity MF schemes

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Inflows into equity mutual funds fell 10 per cent last month to ₹34,419 crore against ₹38,239 crore logged in August as the fund mop-up through equity new fund offers (NFOs) dipped to ₹9,873 crore (₹11,067 crore).

Thematic funds garnered the highest inflow of ₹13,254 crore (₹18,117 crore) with four NFOs attracting investment of ₹7,842 crore. Large- and mid-cap received inflow of ₹3,598 crore (₹3,294 crore), while multi-cap and flexi-cap funds got ₹3,508 crore (₹2,475 crore) and ₹3,215 crore (₹3,513 crore).

Investors continued to book profit from focused and ELSS as they recorded net outflow of ₹84 crore and ₹205 crore.

Hybrid schemes inflows plunged to ₹4,901 crore (₹10,005 crore) as the arbitrage funds logged in a net outflow of ₹3,532 crore (inflow of ₹2,372 crore).

Investor base widens

SIP contribution hit an all-time high of ₹24,509 crore last month against ₹23,547 crore in August. The SIP AUM increased to ₹13.81 lakh crore (₹13.39 lakh crore).

Debt funds recorded an outflow of ₹1.14 lakh crore (inflow of ₹44,169 crore). Overall net AUM of the industry fell marginally to ₹67.09 lakh crore (₹77.70 lakh crore).

Venkat Chalasani, Chief Executive, AMFI, said the industry has reached a milestone of 5.01 crore unique investors with folio count surpassing 21 crore, underscores the efforts taken by the AMCs and distributors to spread financial awareness.

The industry’s continued diversification into various product categories and innovative offerings is driving growth and providing investors with a wider range of options to meet their diverse financial goals, he said.

Viraj Gandhi, CEO, Samco MF, said flexi-cap and large-caps are losing their lustre and market dominance due to their subpar performance and inability to draw in bigger inflows relative to their peers.

For last five month, he said NAV of mid-cap funds has overtaken that of large cap and this difference is widening every month, he added.

Word of caution

Melvyn Santarita, Analyst – Manager Research, Morningstar Investment Research India, said investors should be cautious while selecting funds specially from the sector/thematic category as they belong to very high-risk and high return category and may not fit in the portfolio of every investor.

Akhil Chaturvedi, Executive Director, Motilal Oswal AMC, said markets were volatile last month with several events playing out and the most important being the crises in Israel-Iran. Given where the valuations are placed, there has been a slight slowdown in equity inflows, with notable reductions in sectoral/thematic funds.