Equity Mutual Funds See Inflows For Sixth Straight Month

Investments into equity mutual funds dropped even as stock markets rallied on optimism from a rising pace of vaccination, a rebound in foreign inflows and enhanced government support to aid the recovery after the deadlier second wave of the pandemic.

Net inflows into equity and equity-linked schemes declined 61.6% over the preceding month to Rs 8,666.7 crore in August, according to data released by the Association of Mutual Funds in India. Yet, that’s the sixth straight month of inflows into such schemes.

This comes as the Nifty 50 gained 8.7% during the reported month. The 50-stock gauge also touched 17,000 for the first time in August.

Investors pumped in a net Rs 50,758. 7 crore into equity schemes so far in the fiscal ending March 2022 compared with a net outflow of more than Rs 25,000 crore in FY21.

Category-Wise Trends

Only mid-cap funds witnessed inflows in August. Investors piled into such schemes for the sixth month in a row.

Large, multi and small caps, on the other hand, witnessed outflows during the period. While multi-cap funds saw withdrawals after three months, outflows from large and small caps came after five months.

AMFI started offering granular data since April 2019.

SIP Flows

Contributions to systematic investment plans rose for the fourth straight month to hit a fresh all-time high in August. Nearly 25 lakh SIP accounts opened in August, AMFI said in a conference call.

Net Flows

All mutual fund schemes—debt or equity—saw a net inflow of Rs 32,976.2 crore compared with a net investment of Rs 1.14 lakh crore in July. The average assets under management stood at Rs 36.1 lakh crore.

Liquid funds saw a net outflow of Rs 714.1 crore in August against an inflow of Rs 31,739.8 crore in July. Such schemes are used by companies to park short-term cash.

Overnight funds witnessed an outflow of Rs 11,807.7 crore compared with an inflow of Rs 5,932.6 crore in July.

Credit-risk funds saw a net inflow for the fourth straight month in August. Before that, investors pulled out of such funds every month at least since April 2019, barring January.