Volatility in the equity markets has finally led to slowdown in the net inflows of equity mutual funds. The latest data from Association of Mutual Funds in India (Amfi) shows that equity funds saw net inflows of Rs1,634 crore, slowest since April 2014. The assets under management (AUM) of the entire mutual fund industry at the end of February stood at Rs12.62 lakh crore declining for fourth consecutive month.
In April 2014, net inflows into equity funds was Rs208 crore, but since then equity funds has seen a continuous increase in their net monthly inflows. In the previous calendar year, equity funds had seen inflows of over Rs85,000 crore-average monthly inflows of around Rs7,100 crore. However even in Janaury, equity funds had seen sharp fall in their net flows at Rs2,128 crore largely due to the unstable equity markets.
A Balasubramanian, CEO at Birla Sun Life Asset Management Company says, “Despite markets being unsettled we have seen net inflows into equity category. In the last few months, lump sum investments have slowed down but systematic investment plans (SIPs) continue to rise. With stability in the commodity sector and positive Finance Budget, we believe volatility will reduce and investors will continue to invest through mutual funds.” In the month of February, not only equity funds, but even equity linked saving scheme (ELSS) and other exchange traded funds (ETFs) saw net inflows of Rs888 crore and 1,190 crore, respectively.
In February, Indian equity markets were down by over 7.5% because of the domestic as well as international issues. The data from Amfi also shows that, in the month of February mutual fund industry saw net inflows of Rs23,028 crore, mostly coming in from liquid funds.
According to the CRISIL, Gold ETFs posted their highest jump in 30 months, growing 9.4%, or by Rs576 crore, to Rs6,672 crore, thanks to mark-to-market (MTM) gains from a rise in underlying asset values. Gold prices, as represented by CRISIL Gold Index, rose 12.34% in the month due to a strong domestic demand and a firm global trend. “The category, however, continued to witness outflows – for the 33rd month in a row,” said CRISIL in its report.