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    Equity mutual funds see a 95% fall in net inflows in June

    Synopsis

    Inflows into mutual fund schemes through SIPs in June fell to Rs 7,927 crore from Rs 8,123 crore in the previous month.

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    Net flows into equity mutual funds tumbled 95% in June from the previous month as the recent rebound in the market prompted investors to pull money out and stay on the sidelines. Equity schemes got Rs 240 crore in June — their lowest monthly flows in four years — as against Rs 5,246 crore in May.

    However, average assets under management of equity funds rose to Rs 6.89 lakh crore in June, compared to Rs 6.31 lakh crore in the previous month thanks to the gains in the stock market and stability in flows through systematic investment plans (SIPs).

    Inflows into mutual fund schemes through SIPs in June fell to Rs 7,927 crore from Rs 8,123 crore in the previous month.

    “There is low conviction about this equity market rally and investors are booking profits as soon as they cross par value. As the pandemic continues, they are worried about the uncertainty and how the economy will shape up over the next couple of years,” says Anand Varadarajan, business head, Tata Mutual Fund. The Sensex and the Nifty have run-up close to 40% from the four-year lows on March 23 on account of easy monetary policy by central banks in developed economies.

    Within equities, multi-cap funds and large-cap funds saw outflows of Rs 778 crore and Rs 213 crore, respectively. Tax-saving ELSS and focused funds saw inflows of Rs 587 crore and Rs 317 crore, respectively. Mid- and small-cap funds saw inflows of Rs 290 crore.

    Debt schemes saw net inflows of Rs 2,862 crore with AUM of Rs 12.36 lakh crore in June. In May, debt schemes saw net inflows of Rs 63,665 crore with average assets of Rs 11.53 lakh crore.

    Liquid funds saw outflows of Rs 44,223 crore as corporates withdrew for quarter-end considerations and payment of advance tax. Distributors said many investors had pulled money out of various debt scheme categories soon after Franklin Templeton shut down six schemes. Some of the debt scheme categories that invest in ‘AAA’ rated papers are seeing strong inflows, they said.

    Corporate bond funds saw inflows of Rs 10,737 crore; low-duration and short-duration funds saw inflows of Rs 20,560 crore while banking and PSU debt funds saw inflows of Rs 5,477 crore.

    “Lower bank deposit rates, reluctance to get back into equities at higher levels is bringing back some flows to quality debt funds with AAA rated portfolios,” said Ashish Shankar, deputy managing director, Motilal Oswal Private Wealth.

    Some investors preferred to increase their allocation to the gold. ETFs mirroring gold prices saw inflows of Rs 494 crore in June.

    Net inflows in MFs (Rs crore)
    Fund category Jan
    2020
    Feb
    2020
    March
    2020
    April
    2020
    May
    2020
    June
    2020

    Multi cap 1,722 1,624 2,268 1,240 759 -778
    Large cap 1,154 1,607 2,061 1,691 1,556 -213
    Large & mid cap 692 811 859 346 704 88
    Mid cap 1,798 1,451 1,233 497 280 37
    Small cap 1,073 1,498 163 384 293 249
    Focused 1,305 1,467 1,994 743 670 317
    Source: Amfi India

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    1 Comment on this Story

    Binu Pillai31 days ago
    Mutual Funds are bigtime FRAUDS because when it comes to Profit they keep it their side and give you very little bonus, when comes to Loss they pass on the entire load in you...
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