NEW DELHI: Mutual fund investors continued to pour money into schemes for the fourth straight month in June as indices consistently hit fresh record highs. However, the quantum was far lower than the previous month.
Amfi data released for the month of June said investors poured in a net Rs 5,988.17 crore, against the previous month’s deposit of Rs 10,082.98 crore in equity-oriented funds, thanks to buying in broader market funds. Equity mutual funds saw a total inflow of Rs 26,911.09 crore and outflow of Rs 20,922.92 crore, both of which were higher than last month’s figures.
Midcap funds saw the biggest inflow at Rs 1,729.07 crore, while sectoral and thematic funds along with flexicap fund categories saw more than Rs 1,000 crore investment. ELSS funds saw withdrawal of money.
“With the net inflows in March, April, May and now in June, clearly investors are gaining their conviction back in the equity market. However, the lower quantum of net inflows compared to May could also be attributed to profit booking by investors with equity markets witnessing sharp rally in recent times,” said Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.
“This is evident from the high redemption amount in June compared to May. But at the same time, the amount mobilised was also higher in June than May, signifying that investors are willing to invest more in equity markets now,” he added.
Thanks to the inflows, domestic institutional investors, which mostly comprise mutual fund managers, bought a net Rs 7,043.8 crore worth of stocks. FIIs were also net buyers in June and invested Rs 17,215 crore in the equity markets, as per NSDL data.
SIP inflow in April rose to Rs 9,155.84 crore from Rs 8,818.90 crore in the previous month. Total number of SIP folios saw a marginal jump to 4.02 crore from 3.88 crore. The assets under management (AUM) from SIPs rose to Rs 4.83 lakh crore, from 4.67 lakh crore in May.
“It is particularly very encouraging to witness a good amount of interest in dynamic/asset allocation funds. The prime objective of the funds in this category is to use valuation models and then dynamically rebalance the portfolio between equities and fixed income, ensuring better risk-adjusted returns for investors. In the current environment, dynamic/asset allocation funds are certainly a good option for investors,” said Akhil Chaturvedi, Associate Director, Head of Sales & Distribution, Motilal Oswal AMC.
Debt mutual fund schemes also saw net inflows worth Rs 3,566.39 crore. However, withdrawal of Rs 13,987.73 crore truncated that number. Low duration funds and overnight funds drew the most investment this month.
The total mutual fund AUM as on June 30 rose to Rs 33,66,876.50 crore thanks to net inflow of Rs 15,320.28 crore. Mark to market gains also supported the AUM rise. BSE Sensex climbed 1.05 per cent during June, while BSE Midcap advanced 3.57 per cent and BSE Smallcap added 6.93 per cent.