Net inflows into equity and equity-linked schemes stood at Rs 5,988.2 crore in June, according to data released by the Association of Mutual Funds in India. This is the fourth straight month of inflows into the category. The inflows are in step with the stock market’s 1 per cent rise in June.
Large-cap (Rs 547 crore), Mid-cap (Rs 1729 crore) and Small-cap (Rs 705 crore) funds witnessed net inflows for the fourth straight month in June. Multi-cap funds saw Rs 209 crore inflows. Interestingly, contributions to Systematic Investment Plans (SIP) rose for the second straight month to Rs 9,155 crore in June.
“Investors continue to invest in pure equity schemes resulting in positive net sales of almost Rs 6,000 crore, this is slightly lower than last month due to higher redemptions. For now, the trend surely is in favour of Indian Equities by domestic investors,” says Akhil Chaturvedi, Associate Director, Head of Sales & Distribution, Motilal Oswal AMC.
For the industry as a whole, MFs saw a net inflow of Rs 15,320 crore in June, with average assets under management at Rs 34.1 lakh crore. Do note the net inflows number for equity fell 40 per cent month on month. On the debt side, liquid funds saw a net inflow of Rs 2,078 crore against an outflow of Rs 45,447 crore in May. Overnight funds saw a net inflow of Rs 4,459 crore in June compared with an outflow of Rs 11,573 crore a month earlier. However, credit risk funds saw a net inflow for the second straight month in June.
After witnessing net outflows to the tune of Rs 44,512.04 crore in May, Debt-oriented mutual funds received net inflows of Rs 3,566.39 crore in June. “It was a mixed bag for the segment with categories such as Money Market Fund, Ultra Short Duration Fund, Short Duration Fund and Gilt Fund witnessing significant net outflows; whereas categories such as Floater Fund, Low Duration Fund, Overnight Fund and Liquid Fund received good net inflows,” says Himanshu Srivastava, Associate Director â€“ Manager Research, Morningstar India.
After witnessing significant outflows on the back of new guidelines around valuations and fund exposure norms for AT1 bonds, the scenario appears to be stabilising for Banking & PSU funds. In June, investors invested net assets worth Rs 1,357.55 crore, which could be because of the safety that these funds offer.
NS Venkatesh, Chief Executive said: “The Mutual Fund industry is witnessing a sharp rise in the number of new investors, which has doubled in the last four years to 2.39 crore unique investors. Many new investors are seen embracing mutual funds through the SIP route, over other traditional investment avenues….SIP AUM at an all-time high and now forming almost 15 per cent of the total industry AUMs and number of SIP accounts breaching 4 crore mark for the first time, reflects continued retail investor confidence in the mutual fund asset class.”
Gold ETFs continued to add net positive AUMs month on month and witnessed a steady rise in folios too. Hybrid funds saw the highest net sales in June at over Rs 12,000 crore compared to April and May for Q1 of FY 22, according to Lakshmi Iyer, CIO (Debt) & Head Products, Kotak Mahindra AMC.