MF News Equity inflows decline for the third month in a row

Equity inflows decline for the third month in a row

Debt fund flows turn positive, first time since April 2018.

Team Cafemutual Feb 9, 2019

Inflows in equity funds have been declining since November 2018. Inflows reducing to Rs.5,206 crore in January as against Rs. 6,651 crore in December and Rs. 8,629 crore in November.

Equity funds include pure equity, balanced and ELSS funds.

Lower inflows in pure equity funds and net outflow of Rs. 952 crore in balanced funds contributed to this decline. ELSS funds meanwhile saw an increase in their inflows because of the tax season. AMFI CEO N S Venkatesh contributes the weaker flows to investors taking a wait and watch approach on account of upcoming elections, persistent market volatility and global economic scenario. “However, the macroeconomic scenario favours India. The GDP growth is reasonably good. With corporate earnings stabilising, I expect increased inflows in equities post election,” believes Venkatesh.

Debt fund flows turned positive for the first time since April 2018. While the quantum of outflows in debt schemes reduced during the last few months, the net flow was negative. Last month saw the tide finally turn in favour of debt funds, which recorded net inflows of Rs. 1,991 crore. Debt funds include income and gilt funds.

According to N S Venkatesh, debt funds are slowly showing signs of recovery amidst change in stance by US Fed and improvement in domestic macroeconomic scenario. With RBI easing rates, he expects more inflows in debt funds in the coming months.

Mutual fund flows turned positive again in January owing to Rs. 58,637 crore inflows in liquid funds. Consequently, the industry saw inflows of Rs. 65,439 crore last month, a substantial improvement over Rs. 1.37 lakh crore outflow in December.

Overall, industry reported month-end AUM of Rs. 22.86 lakh crore in January.

Monthly AUM January 2019

Funds	Net inflow/outflow (Rs. cr.)	Month end AUM Jan-2019 (Rs. cr.)
Equity funds	5,206	9,49,382
Debt	1,991	7,05,553
Arbitrage Funds	-1,076	56,373
Liquid/ Money Market	58,637	5,09,156
Gold ETF	-55	4,732
Other ETFs	721	1,07,342
Fund of Funds Investing Overseas	15	1,823

Source: AMFI

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13 Comments

K v raghupathi · 5 years ago `

Dear Mr Venkatesh,

Equity inflow decreasing since November 2018. Apart from the reasoning for decline in inflow, you have intelligently ignore to identify the declined participation of IFAs post 22 October revenue structure. It is not good financial decision for IFAs in tire 3 and 4 cities to reach out to new customers many times to enroll them to participate. IFAs success ratio is reduced to 40% from 80%. But we have spend our resources each time. Industry keep enjoying reducing our income.

If you are all so concern about the good of the investor, why don’t AMFI advise your AMC members not to charge fund management charges on such funds those performance were below their own set bench mark for consecutive three months.

SUBHASISH Mondal · 5 years ago `

An IFA's income declined by 80% post banning UF brokerage, similarly ye to hona hi tha,. If IFA stop doing their job, then must declined in new PAN(investor)

Bhupeshwar Giri · 5 years ago `

Equity inflow will decline further, post elections also, reasons are well stated in above comments. Wait, till it is too late.

Amarsh Kumar shrivastwa · 5 years ago `

I am agree to Mr. K. V Raghupati,AMFI as well as SEBI DO NOT want the money with no guarantee for interest,growth,and also to return invested money. They want loan for commission.

vinod kumar singh · 5 years ago `

i am agree with venkatesh

Desmond Fedrick Mascarenhas · 5 years ago `

Apart from the ban on Upfront, the industrial growth has fallen due to wrong policies of the Government, resulting in the company earnings and thereby fall in the stock valuation which has drastically impacted mutual fund valuation.

bichitra Biswas · 5 years ago `

When SEBI propposed to reduce the commission of Mf distributors it mentioned one reason being more participation from retail investors but in reality the opposite happened ,so SEBI should rethink on the same.

P Bhargavi · 5 years ago `

Dear venkatesh sir,
Andi is proving a point that it is doing for the mutual funds and not for those ,who are doing the job of building labourers.
It is shame that barring sundaram no other MF had voiced protests with SEBI.

Vishal Rastogi · 5 years ago `

Yeh toh Trailer hai...... real seen abhi aana baki hai !

Bantadhaar · 5 years ago `

A motor that requires 240 volts to run, is now provided with 20 volts...... How will it run? Stiff necked SEBI's policy makers wants to reflect what? They must understand that this is INDIA and not UK.... Here Bullock carts, Bicycles and Car drove on the same roads....

Pramod Kumar Jain · 5 years ago `

Mutual Fund AUM growth rate is falling due to the SEBI decision of all trail model effected from November 2018, which is making new distributor’s business NONVAIBLE
Now SEBI should rethink for reducing EXPENSE RATIO & Commissions wef 1/4/2019 , otherwise it is also possible that AUM groth rate may be negative

Pramod kumar Jain · 5 years ago `

Mutual funds AUM growth rate is falling due to the SEBI decision of all trail model effected from November 2018,which is making new distributor’s business NONVIABLE
Now SEBI should rethink before reducing EXPENSE RATIO & Commissions of IFA,s wef 01/04/2019, otherwise it may also be possible that AUM growth rate may be NEGATIVE from May 2019 onwards

Rajesh · 5 years ago `

Post upfront commission ban, mutual fund business from a top notch bank in a state capital has reduced to one third. Just imagine if this is the case with bank RMs then how much IFAs have got a hit. All the existing investors would also redeem their money sooner rather later because the distributors might not be able to sustain their business model & very soon mf industry will loose its shine

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