December equity mutual fund inflows lowest in 27 months

By: | Published: February 9, 2019 5:07 AM

Flows into debt funds were Rs 60,628 crore in January, compared with outflows to the tune of Rs 1.52 lakh crore in December, 2018 However, inflows in January were smaller than inflows Rs 1.29 lakh crore in November 2018.

Bank bonds, invest in bonds, mutual funds, tax saving, Reserve Bank of India, RBI, Bank shares, Bank stocks, insolvency, banking sector india

Inflows into equity mutual funds in January were subdued at Rs 5,082 crore, the second-lowest so far in 2018-19. In December 2018, equity funds had attracted only Rs 4,442 crore, the smallest sum in 27 months.

Flows into debt funds were Rs 60,628 crore in January, compared with outflows to the tune of Rs 1.52 lakh crore in December, 2018 However, inflows in January were smaller than inflows Rs 1.29 lakh crore in November 2018.

Sector experts said the negative returns, especially from the mid- and small-cap schemes were among reasons for investors becoming less interested in MF schemes.

Swarup Mohanty, chief executive officer of Mirae Asset Global Investments (India), said: “While in the past two years or so, we have seen inflows into mid-cap and balanced funds, the correction in mid-cap stocks and negative returns from the schemes has led to some redemption.”

However, while flows have slowed down on the equity side, the contribution to systematic investment plan (SIPs) continue to remain strong. In the year ended February 7, mid-caps have given an average returns of (-) 8.85 percent while small-cap funds have given returns of (-) 18 percent, data from Value Research showed.

Muted inflows in equity funds are also largely due to outflows from arbitrage funds which stood at Rs 1,076 crore.
However, ELSS and pure equity funds saw inflows of Rs 1,244 crore and Rs 4,914 crore, respectively, in January. If we just look at pure equity funds, January marks the third consecutive month of fall in inflows. In November and December, pure equity funds had seen inflows of Rs 7,579 crore and Rs 5,765 crore, respectively.

READ ALSO | Income Tax Alert! Taxmen watching your credit card spending; overuse of cards may attract a tax notice

The average monthly inflows into equity schemes in the period of April-January slowed down to Rs 9,557 crore from Rs 14,200 crore in 2017-18. Despite flows slowing down into equity funds, the contribution of SIPs stood at over Rs 8,063 crore in January, against Rs 8,022 crore in December.

In the period from April to January, total contribution of SIPs stood at Rs 76,542 crore. In the last financial year, the contribution of SIPs was Rs 67,190 crore while in 2016-17, it was Rs 43,921 crore.

The data from Amfi show that debt funds witnessed inflows of Rs 60,628 crore in January. Liquid funds and income funds saw net inflows of Rs 58,637 crore and Rs 2,080 crore, respectively, in the same month. Gilt funds saw outflows of Rs 89 crore.

“We have seen inflows in liquid funds in January after it saw outflows in previous months. We are witnessing participation from corporates and banks into liquid schemes. After many months, income funds have seen inflows, which were largely due to the participation into ultra-short term debt funds,” said the debt fund manager of a leading fund house.

NS Venkatesh, CEO of Amfi, said: “Despite acute market volatility owing to credit events and global uncertainty, retail investors continue to repose their faith in the India growth story. This is quite evident from the SIP flows, which continue to rise sequentially…”

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition