In the four years after investors preferred to book profits rather than remain invested, equity fund mutual funds have seen their first monthly net outflow reflected declining household cash flows and fear of market accidents.
In addition to a net outflow in Rs 2,480.35 crore in July, net inflows into equity mutual funds, which were at Rs 240.55 crore, decreased in July. Net Rs 1,033.17 Cr have been removed. The outflows of Rs 579,10 Cr from Multicap Funds and the Mid Cap Funds. This is the fourth consecutive month of fall in equity inflow.
Pandemic affected the investors’ cash flows falling below the level of Rs 8,000 crore.
The SIP inflow in June decreased to Rs 7,830,66 from 7,927,11 crore last month, a decline of 1.2 percent, as stated by the Mutual Funds Association in India (AMFI) figures on Monday.
The total number of SIP folios had a marginal leap to 3.27 from 3.23 crore. SIP Assets Under Administration (AUM) were up 3.19 lakh crore from Rs 3 Lakh crore.
“They book their profits. Perhaps on the side-lines, they are waiting to reach the market again. The same goes for hybrid and arbitration funds that saw outflows, “says N Venkatesh, Amfi Chief executive at AMFI.
The sharp drop in inflows occurred when benchmark indices increased due to ample market liquidity. Sensex rose in July by 7.71%, with BSE Midcap adding up to 5.39% and BSE Small-cap index adding up to 5.18%.
Heavy outflows and an opportunity to book profits in overvalued shares compelled domestic institutional investors to sell shares worth Rs 10,008 crore by July, mostly involving mutual fund managers. At the time, FIIs pumped money into Indian capital markets.
In comparison, mutual funds schemes with net investments of Rs 91,391 crore saw a heavy inflow of funds.
Liquid funds, short-term funds, low duration funds, and corporate bond funds stood out with net inflows over Rs 10,000 crore for the month.
“The overall signal for the mutual fund industry is that it is still showing strong growth. Debt funds have recovered from shocks of Franklin Templeton. They show quite good numbers, “said Venkatesh.
Rs 89,812,78 crore to Rs 27,11 lakh crore was increased by the total AUM of the mutual fund industry. Part of the income also represents the industry’s major business growth.
