Equity funds collect net inflows of Rs.2.85 lakh crore in FY 2017-18

Despite market volatility and re-introduction of LTCG and dividend distribution tax, equity funds did well in FY 2017-18.  Equity funds including balanced funds, ELSS and equity ETFs witnessed a triple-digit growth of 117% in its net inflows, i.e. from Rs.1.13 lakh crore in FY2016-17 to Rs.2.85 lakh crore in FY 2017-18, an addition of Rs.1.54 lakh crore, shows the latest AMFI data.

This growth is largely due to increasing appetite for equity funds in investors.

Among equity funds, pure equity category saw the highest growth in net inflows last fiscal. The category saw net inflows of Rs.1.56 lakh crore in FY 2017-18 compared to Rs.60,270 crore in FY 2016-17, a massive growth of 160%.

Experts attribute this to the attractive performance of equity funds and lacklustre performance of other assets class. Radhika Gupta, CEO, Edelweiss Mutual Fund said that post demonetisation, many retail investors have started exploring other investment avenues such as equity funds for better returns.

Another factor that has helped the industry create an equity culture is growing awareness of mutual funds through IAPs. “The MF industry added many new investors last year. This is due to the impact of IAPs organised across the country through ground level activity. In addition, the commercials on ‘Mutual Funds Sahi Hai’ have created a buzz for MF investments among people,” Radhika[PU1]  added.

Balanced funds continued to garner investor interest in FY2017-18. The category recorded net inflows of Rs.89,757 crore in FY 2017-18 compared to Rs.36,610 crore, an increase of 145% or Rs.53,147 crore. Many HNIs and retail investors invested in balanced funds due to attractive performance and regular dividend payouts.

However, the total inflows in FY 2017-18 fell 21%. The industry recorded net inflows of Rs.2.72 lakh crore in FY 2017-18 compared to Rs.3.43 crore in FY 2016-17. This was primarily due to outflow from income and liquid funds. Income funds and liquid funds recorded net outflows of Rs.5,851 crore and Rs.2,936 crore, respectively.

Of the total inflow of Rs.2.72 lakh crore, the MF industry collected Rs.95,995 crore through NFOs.

Yearly outflow/inflow

                                                                                Source: AMFI