Equity funds received the highest ever inflows of Rs. 14,597 crore in November at a time when FIIs pulled out Rs. 17,736 crore from equities.
At a time when FIIs are exiting Indian equities in hordes, mutual funds are buying which is evident by the resilience shown by markets.
In November 2016, net FII outflow stood at Rs. 17,736 crore while mutual funds received net inflows of Rs. 14,597 crore in equity funds, including balanced, equity ETF and ELSS categories, shows the latest AMFI data. Fund officials say that a majority of these inflows have come in pure equity funds and not arbitrage funds. In fact, sources say that the industry would have seen net outflow of around Rs. 1,500 crore from arbitrage funds.
Net inflow/outflow in November 2016
|
Category |
Net inflow/outflow |
AUM |
|
Equity |
8,068 |
4,18,363 |
|
Balanced |
3,632 |
62,907 |
|
ELSS |
1,011 |
50,305 |
|
Other ETFs |
2,830 |
25,211 |
|
Income |
18,306 |
7,84,305 |
|
Liquid |
1,350 |
2,81,011 |
|
Gilt |
899 |
18,574 |
|
FOF overseas |
-6 |
1,756 |
|
Gold ETFs |
-69 |
5,737 |
|
IDF |
|
1,842 |
|
Total |
36,021 |
16,50,011 |
|
Source: AMFI Rs. Cr |
||
The healthy inflows in equity funds is acting as a shock absorber for our markets which is evident by the fact that the markets have fallen only 5% in November. Compare this to October 2008 when the market had corrected by 24% to reach 9000 levels. The net FII outflow in October 2008 stood at Rs. 14,248 crore, which is less as compared to Rs. 17,736 crore net FII outflow in November 2016.
“The FII outflow was at a historical high in November 2016 but we didn’t see any major correction in the markets. Mutual funds have played a big role in supporting the market,” says Vinod Jain of Jain Investments.
Jain says that institutions, HNIs as well as retail investors have taken the correction as an opportunity to enter the market.
Of the Rs. 14,597 crore net inflows in equity category, a large share (71%) or Rs. 8,068 crore came in equity funds, followed by balanced funds (Rs. 3,632 crore), ELSS (Rs. 1,011 crore) and Equity ETFs (Rs. 2,830 crore). “The equity inflows have reached an all-time high in November at a time when there is so much of uncertainty. This is a significant achievement for the MF industry,” says Manoj Nagpal, MD & CEO, Outlook Asia Capital.
The total equity AUM of the industry has reached Rs. 5.56 lakh crore in November, which is 34% of the total Rs. 16.50 lakh industry AUM.
The industry received positive net inflows in all categories except Gold ETFs and overseas fund of funds. This helped the industry receive total net inflow of Rs. 36,021 crore in November. As a result, the industry’s AUM touched another high of Rs. 16.50 lakh crore in November, up by 1% from Rs. 16.28 lakh crore in October.
