Equity mutual funds inflows have declined for the fourth consecutive month in August. The total equity MFs inflow has decreased 11.4 percent month-on-month to 8,375 crore Rupees in August, based on data available at the AMFI (Association of Mutual Funds in India).
However, the MF industry has seen a total inflow of 1.74 lakh crore Rupees, which is the highest ever since 2011, and an outflow of more than 32,000 crore Rupees in July. The liquid/ money market category has accounted for the major portion of the total MF inflow.
Swarup Mohanty, Chief Executive Officer, Mirae Asset Global Investments (India) Pvt. Ltd., anticipates an increase in equity MF inflows as the market gets wider and the gap between the benchmark and fund returns gets smaller
According to Aashish Somaiyaa, Chief Executive Officer, Motilal Oswal Asset Management Company, stated that equity mutual funds inflows after subtracting the NFO (new fund offer) inflow don’t look exciting.
He also added that the balanced fund flow is massively holding on in the negative zone after subtracting two NFOs worth about 4,500 crore Rupees.
The general equity mutual fund category sales witness a normal 16 percent progress, but a sharp spike of 35 percent in redemptions, said Sunil Subramaniam, Chief Executive Officer, Sundaram AMC. He also stated that the equity mutual fund category witnesses a 9 percent reduction in net sales because of profit-booking, according to Bloomberg.
The main reason for the net inflows into the Indian mutual funds to slow down to a five-month low in August is the uncertainty in the markets. Moreover, the redemption pressures from equity MF schemes also increased in August, forcing 35 percent of investors to choose a profit booking with the markets climbing record highs, reported LiveMint.
With the net equity mutual funds inflows showing a steady decline of 11.4 percent to 8,375 crore Rupees in August, the equity MF schemes witness an infusion of 9,452 crore Rupees in July, as per data released at the AMFI.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]