After an exceptional July, when inflows into equity funds soared to Rs 42,702 crore – the highest this calendar year – in August, flows were more subdued at Rs 33,430 crore – a drop of 22%, according to data from Association of Mutual Funds in India (Amfi).
Retail investors continued to tap the equity market through systematic investment plans (SIPs) in the month of August, with investments flat at Rs 28,265 crore. Overall, the industry’s assets under management (AUM) declined marginally to Rs 75.18 lakh crore, from Rs 75.35 lakh crore in July.
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It also seems that investors turned more cautious. While large-cap and mid-cap saw net inflows rising by 33% and 2.95%, respectively whereas small-cap and thematic schemes saw sharp falls at 23% and 59%, respectively.
New fund offers (NFOs), which had collected a whopping Rs 30,416 crore (30 schemes) in July, saw meagre collections of Rs 2,859 crore (23 schemes).
Said Venkat N Chalasani, Chief Executive, AMFI, “These steady flows across equity, hybrid, passive funds and SIPs underscore the continued confidence of investors in mutual funds as a long-term wealth creation avenue.”
Industry experts believe that despite a tough month, the good news is that most investors continued with their SIPs. In August, benchmark indices fell over 1.5% while the broader market (mid and small cap) was down up to 3.7%.
Jatinder Pal Singh, CEO, ITI Mutual Fund, “… Large-cap funds grew 33% to Rs 2,834.88 crore and mid-caps edged up 2.8% at Rs 5,330.62 crore. ELSS funds turned positive with Rs 59.15 crore inflows. These trends show steady investor confidence, backed by India’s solid economy and growth outlook.”
The number of mutual fund folios rose to 248.9 million, against 245.7 million in July – an increase of 3.2 million folios.
Akhil Chaturvedi, executive director and chief business officer, Motilal Oswal Asset Management Company said that besides NFOs, the rest of the momentum is steady and healthy. “Given past trends, I was hoping for a higher SIP number which is now flat around. Broadly, Indian investors continue to add equities to their allocation despite global headwinds and FII selling,
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