Market participants say inflows into equity funds were largely due to the rising contribution of systematic investment plans (SIPs) and several investors investing lump-sum amounts when markets were down.
Despite Indian equities clocking the worst July performance in 17 years, equity-oriented schemes of mutual funds witnessed the highest inflows in the current financial year at Rs 8,112.52 crore. Net inflows into mutual funds in July was at Rs 87,087.71 crore, against outflows of Rs 1.59 lakh crore in June. Market participants say inflows into equity funds were largely due to the rising contribution of systematic investment plans (SIPs) and several investors investing lump-sum amounts when markets were down.
Swarup Mohanty, CEO at Mirae Asset Global Investments (India), said: “That investors are finding these levels conducive for buying speaks of the maturity of equity investors. If such a fall in the market had taken place four-five years ago, investors would have panicked and moved out their money. Now, we have seen participation through SIPs and also lump-sum investments… In July, we have also seen inflows across all the categories and it speaks of asset allocation in a superior way.”
In July, contribution of SIPs stood at Rs 8,324 crore. In the four months of the current financial year, SIP contribution was around Rs 32,867 crore, shows the data from the Association of Mutual Funds in India (Amfi). Market players also say inflows into equity schemes were high because of new fund offers (NFOs), which collected approximately Rs 1,500-1,800 crore.
In equity-oriented schemes, inflows were across categories, barring dividend yield funds, which saw outflows of Rs 25.02 crore. Large-cap and mid-cap funds saw inflows of Rs 1,914.91 crore and Rs 1,393.51 crore, respectively, in July. Focused funds witnessed inflows of Rs 1,872.96 crore. While equity-oriented schemes received inflows, debt schemes saw inflows of Rs 61,845.54 crore in July. Assets under management for the MF industry as on July stood at Rs 24.53 lakh crore, against Rs 24.25 lakh crore in June.