AMFI data: SIPs buck trend as equity mutual fund inflows slump to 4-month low in September

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Published: October 9, 2019 5:17:14 PM

Equity mutual funds inflows slumped to a 4-month low in September, after investors booked profits  after a rally in stock market on the back of corporate tax cut.

Indian equity, expensive despite, sharp correction, market news, Sensex, EPS, FPI Notably, equity mutual fund inflows slumped to Rs 6,609 crore as opposed to Rs 9,152 crore, translating to a slump of 28% on-month.

Equity mutual funds inflows slumped to a 4-month low in September, after investors booked profits  after a rally in stock market on the back of corporate tax cut. However, SIP inflows continued to remain robust. Notably, equity mutual fund inflows slumped to Rs 6,609 crore as opposed to Rs 9,152 crore, translating to a slump of 28% on-month. According to data released by Association of Mutual Funds in India (Amfi), open-ended equity schemes witnessed an infusion of Rs 6,609 crore, while there was an outflow of Rs 120 crore from close-ended equity plans, translating into a net equity inflow of Rs 6,489 crore in the month of September. SIP inflows came in at Rs 8,263 crore as compared to Rs 8,262.94 crore in the previous month.

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“Investors continue to invest into equity funds through SIPs while lumpsum flows remain a mixed bag. There was some profit-booking by investors after the market rally post the corporate tax reduction announcement,” Kaustubh Belapurkar, Director – Manager Research at Morningstar Investment Adviser India told PTI. Notably, while the overall trend was a outflow in September, SIP inflows continue to remain robust. AMFI data shows that the MF industry had added, on an average, 9.24 lakh SIP accounts each month during the FY 2019-20, with an average SIP size of about Rs 2,900 per SIP account.

Mutual funds saw a redemption of Rs 1.52 lakh crore in September as compared to an inflow of  Rs 1.02 lakh crore in August. The industry’s total AUM fell marginally to Rs 25.6 lakh crore.  Liquid funds — with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon — registered an outflow of Rs 1.41 lakh crore in the month. Sharing the key reason behind outflows in liquid funds, NS Venkatesh, Chief Executive, Amfi said that this is observed during quarter end, as mutual funds are redeemed for advance tax purposes and the same is reflected in this month, September being a quarter-end. “We have seen net outflows in ultra short duration, low duration, money market fund categories as well,” he added.

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