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Net inflows into equity mutual fund schemes dwindled significantly in August from record flows in previous month while redemption pressure also increased showed data released by Association of Mutual Funds in India (AMFI) on Wednesday. Equity schemes received net inflow of ₹8,056.80 crore in August, declining 61.15% from ₹20,742.77 crore in July. However, this is sixth consecutive month of positive inflow into such schemes.
As markets hit record highs in August, investors withdrew funds in the month leading to higher redemptions, said experts. Net redemptions in equity schemes were at ₹23144.89 crore in August increasing from ₹17831.65 crore in July.
Aashish Somaiyaa, Chief Executive Officer – White Oak Capital said there is a significant shrinkage in the net flow for equity category and corresponding bump up in net inflow of the balanced advantage category.
“This leads one to believe that on aggregate industry level large balanced advantage new fund offer (NFO) has garnered a lot of traction by way of switches from equity to balanced advantage category. From a retail investors’ perspective in the short term it may not be a bad development given elevated market levels and generally lower risk perception of balanced advantage funds,” he added.
According to Mohit Nigam, Head – PMS, Hem Securities decline on a month-on-month basis in equity MFs could be attributed to profit booking, specifically in some mid and small caps.
NFOs contributed Rs 23,668 crore to all categories of funds in August while in July NFOs collection was at ₹17332 crore. However, SBI Balanced Advantage Fund, launched in August which garnered Rs 14,551 crore, was a hybrid scheme which has a mix allocation to equity and debt. In July, ICICI Prudential Flexicap Fund mobilised ₹9,808 crore which was equity scheme.
Monthly systematic investment plan (SIP) contribution climbed to record high at ₹9,923.15 crore in August. This compares to SIP inflow of Rs 9,608.86 crore in previous month. New SIPs registered during August at 24.92 lakhs is highest ever registration with a record high 4.32 crore SIP Accounts. In August last year, SIP accounts stood at 3.30 crore.
NS Venkatesh, CEO, AMFI said, “Overall positive flows in the open-ended MF schemes and market indices touching all-time high, helped the Indian MF Industry Net AUMs to breach record ₹36 lakh crore milestone in August 2021. Continued robust month on month fund mobilization in arbitrage and dynamic asset allocation schemes and affinity towards Thematic / Sectoral and diversified flexicap schemes since the start of the new fiscal, FY22, including through SIPs has over-shadowed profit-booking during the last few months,” Venkatesh said.
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