By Dhaval Kapadia
The mutual fund industry has given positive returns in the last financial year 2016-17. Compared to the previous financial year, where the equity category witnessed a net inflow of Rs 54,960 cr compared with an inflow of Rs 70,817cr, the fixed income category saw an inflow of Rs 1,76,880cr compared with an inflow of just Rs 28,786 cr in FY’16. Gold ETFs saw a net outflow of around Rs 695cr in FY’17 compared with a net outflow of Rs 798cr in the previous fiscal year. The industry noticed it as a golden period where retail investors also contributed crores of rupees in mutual funds through the SIP mode.
Here is the comparison report of the following mutual fund categories:
Equity
The equity category witnessed a net inflow of Rs 54,960 cr compared with an inflow of Rs 70,817cr in the previous fiscal. Out of which large-cap category funds had an inflow of approximately Rs 11,300 cr, compared with an inflow of Rs 17,300cr in FY’1616. Arbitrage category funds had an inflow of around Rs 13,300cr, while Small/Mid-cap category funds had an inflow of around Rs 8,600 cr compared with an inflow of Rs 10,700cr and Rs 6,400cr, respectively, in FY’16.
| Category | % Return (FY 16-17) | % Return (FY 15-16) |
| India Fund Small/Mid-Cap | 33.20 | -3.64 |
| India Fund Flexicap | 26.41 | -5.65 |
| India Fund Large-Cap | 22.18 | -7.95 |
| India Fund Arbitrage Fund | 6.36 | 6.71 |
| Index | % Return (FY 16-17) | % Return (FY 15-16) |
| IISL Nifty 50 PR INR | 18.55 | -8.86 |
| S&P BSE SENSEX India INR | 16.88 | -9.36 |
| S&P BSE Midcap INR | 32.75 | 0.25 |
| S&P BSE Smallcap | 36.92 | -3.20 |
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Fixed Income
The fixed Income category saw an inflow of Rs 1,76,880cr compared with an inflow of just Rs 28,786cr in FY’16. Within fixed income, accrual strategy funds saw a huge inflow in the last fiscal year. Short-term bond category funds garnered a net inflow of around Rs 95,500cr in FY’17, compared with an inflow of Rs 23,600cr in the previous fiscal, while Credit Opportunity strategy funds had an inflow of around Rs 29,100cr, compared with a net outflow of Rs 1,300cr in FY’16. On the other hand, intermediate bond or what is generally referred to as income funds saw a net outflow of around Rs 9,600cr in FY’17; higher than the net outflow Rs 3,000cr in the previous fiscal. These fund flows have been largely influenced by the RBI’s decision of not reducing interest rates in December and later a changing its stance from accommodative to neutral in February.
| Category | % Return (FY 16-17) | % Return (FY 15-16) |
| India Fund Intermediate Bond | 10.41 | 5.98 |
| India Fund Corporate Credit | 10.18 | 8.46 |
| India Fund Short-Term Bond | 8.92 | 7.60 |
| Index | % Return (FY 16-17) | % Return (FY 15-16) |
| CCIL All Sovereign TR INR | 11.63 | 7.3 |
Balanced Fund
The Balanced fund category gathered a net inflow of around Rs 30,658cr in this fiscal year, compared with a net inflow of Rs 19,665cr FY’16. The fund flow of this category, in this fiscal year, is higher than any of the equity categories on a standalone basis.
| Category | % Return (FY 16-17) | % Return (FY 15-16) |
| India Fund Moderate Allocation | 18.77 | -1.67 |
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Exchange Trade Funds
Gold ETF’s saw a net outflow of around Rs 695cr in FY’17, compared with a net outflow of Rs 798cr in the previous fiscal year, while Large-cap ETF category witnessed an inflow of around Rs 17,000cr this fiscal, compared with a net inflow of Rs 7,650cr in FY’16. This increase in the inflow of Large-cap ETF category can mainly be attributed to the investments made by the EPFO.
| Index | % Return (INR) (FY 16-17) | % Return (INR) (FY 15-16) |
| S&P GSCI Gold Spot | -0.71 | 10.50 |
On the international front, following are the returns generated by some of the widely-followed indices, in their local currency:
| US | FY 16-17 (% Return) | FY 15-16 (% Return) |
| S&P 500 | 14.71 | -0.39 |
| DJ Industrial Avg | 16.84 | -0.51 |
| Europe | ||
| GER: FSE DAX | 23.55 | -16.72 |
| UK: FTSE 100 | 18.59 | -8.83 |
| Asia Pacific | ||
| Shanghai Composite | 7.28 | -19.85 |
| HK: Hang Seng HSI | 16.05 | -16.56 |
| Japan: Nikkei 225 Avg | 12.83 | -12.75 |
All fund flows data are for the period between April and February of the respective fiscal year. Broad category level fund flows data are as per AMFI report of Feb’16 and Feb’17. Sub-category level fund flows data are as per Morningstar category. All the returns data are as of 31st March of the respective fiscal year.
(The author is Director – Portfolio Strategist, Morningstar)