In the month of October, the mutual fund industry saw net inflows after having registered outflows in the preceding two months. However, while money returned to debt oriented mutual fund schemes, equity schemes continued to see outflows. This marked the fourth straight month where mutual fund investors decided to take money away from equity oriented funds despite the strong momentum in stock markets. Inflows worth Rs 1.10 lakh crore were recorded in debt schemes while marginal outflows of Rs 2,725 crore were registered in the equity segment, data sourced by Association of Mutual Funds In India (AMFI) showed.
Among Equity schemes outflows were registered in all but Large & Midcap schemes and Sectoral/Thematic funds. “Usually even as they may be worried, investors prefer not to withdraw when markets are down but it is quite unfortunate that now when values are being restored we are seeing a large number of investors bolt for the door,” said Aashish Somaiyaa, Chief Executive Officer – White Oak Capital. Total outflows from the equity oriented funds stood at Rs 2,724 crore in the previous month. This is a sharp increase from the mere Rs 734 crore worth of outflows registered in September.
“What is surprising is that hybrid/ asset allocation funds which are conservatively managed are also witnessing very high redemptions. This trend is not understandable as broadly these funds are apt to ride through volatile times and best suited for investment in these times of uncertainty given that manage mix of equity & debt allocations depending on the objective the fund,” said Akhil Chaturvedi-Associate Director and Head of Sales and Distribution, Motilal Oswal AMC. He added that as the markets inched towards an all-time high investors are getting cautious and trying to reduce equity weightage. “There is a feeling that markets are ahead of fundamentals and there could be some volatility in coming times, hence appetite for equities is low for now,” he said.
Debt Segment
- Net-inflows of Rs 1.10 lakh crore recorded in the month of October.
- Liquid funds registered massive inflows of Rs 19,582 crore followed by over Rs 15,000 crore worth inflows in Money Market funds, Short Duration Funds, and Corporate Bond funds.
- Among debt funds, only Credit Risk schemes saw net outflows in the month of October. The Rs 414 crore pulled away from credit risk schemes is the lowest tally of outflows recorded in the segment since the Franklin Templeton fiasco earlier this year.
Equity segment
- Multicap funds saw outflows of Rs 1,902 crore while Value/Contra funds recorded outflows of Rs 1,201 crore.
- Sectoral/Thematic funds recorded inflows of Rs 2,214 crore. Large & Midcap funds saw inflows of Rs 256 crore.
- In October, the inflows into the systematic investments plans stood at Rs 7,800 crore, a slight improvement from the inflows of Rs 7,788 crore seen in September.
- Net assets under management in the month were higher at Rs 28.22 lakh crore, against Rs 26.85 lakh crore in the month of September.
