Call it maturity of investors or handholding by their distributors, the party is on for the MF industry despite the slowdown in the overall economy and the equity markets.
In the past two months, equity markets have witnessed a slump with the Sensex falling by 5% and the Nifty 50 declining by 6%. The negative sentiment in broader equity market, however, is far from taking a toll on inflows to equity funds.
In August, inflows to equity funds stood at Rs.9,090 crore marking an increase for the fifth consecutive month. With this, equity inflows have recorded an increase every month since April 2019. Compared to July 2019, equity inflows increased by Rs. 1,077 crore in August.
Among equity funds, multi cap funds saw the highest inflows, followed by small cap funds and large cap funds. Inflows in multi cap funds witnessed a significant jump and stood at Rs.1,581 crore, as against Rs.327 crore in July.
Commenting on these numbers, N S Venkatesh, CEO, AMFI said, “Retail investors interest in equity mutual funds continues to be steady. It displays maturity, as it comes despite uncertainty in the economy and volatility in markets. Net inflows, largely in all categories of equity funds, especially in small and mid-cap funds, as also in ELSS segment, signifies heightened confidence and interest in emerging businesses and disciplined tax planning.”
Debt fund
On the debt front, liquid funds, banking & PSU funds and corporate bond funds continued to record strong inflows in August. Inflows into these funds were healthy in July as well.
In corporate bond fund, inflows stood at Rs.3578 crore in August, as against Rs.2,573 crore in July. In case of banking & PSU funds, the inflows was to the tune of Rs.2,769 crore, compared with Rs. 5,914 crore.
Experts feel corporate bond funds have now become attractive because of the rate cuts by RBI. The central bank has reduced repo rate by 110 bps so far in 2019 and it may deliver more rate cuts in near-term due to the slowdown in Indian economy.
Vishal Kapoor, CEO, IDFC AMC said, “On the broader debt side, we see the continued flow towards the short end of the curve in categories like corporate bond and banking & PSU debt.”
SIP trend
SIP trends too continue to be encouraging. SIP inflows was Rs. 8,230 crore in August, slightly down from Rs. 8,324 crore in July.
Further, the data shows that the industry added 3 lakh new SIP accounts in August. Also, SIP AUM rose to Rs. 2.81 lakh crore in August from Rs. 2.78 lakh crore in July.
Overall, industry recorded strong inflows of Rs. 1.02 lakh crore in August. This was largely because of inflows of Rs. 79,428 crore in liquid fund category.
Mutual fund inflows
| Industry flows | ||||
| Scheme Name | Net Inflow /Outflow Rs. Crs. | Change (Rs. Crore) | Change | |
| Aug 2019 | Jul-19 | |||
| Open ended Schemes | ||||
| Income/Debt Oriented Schemes | ||||
| Overnight Fund | -503 | 6,021 | -6,524 | -108% |
| Liquid Fund | 79,428 | 45,441 | 33,987 | 75% |
| Ultra Short Duration Fund | 2,829 | 601 | 2,228 | 371% |
| Low Duration Fund | 794 | -223 | 1,018 | 455% |
| Money Market Fund | 3,765 | 5,063 | -1,298 | -26% |
| Short Duration Fund | 994 | 586 | 408 | 70% |
| Medium Duration Fund | -561 | -937 | 375 | 40% |
| Medium to Long Duration Fund | -28 | -60 | 32 | 53% |
| Long Duration Fund | 11 | 59 | -48 | -82% |
| Dynamic Bond Fund | -67 | -122 | 55 | 45% |
| Corporate Bond Fund | 3,578 | 2,573 | 1,005 | 39% |
| Credit Risk Fund | -2,270 | -3,411 | 1,142 | 33% |
| Banking and PSU Fund | 2,769 | 5,914 | -3,145 | -53% |
| Gilt Fund | 307 | -120 | 427 | 357% |
| Gilt Fund with 10 year constant duration | 40 | 80 | -40 | -50% |
| Floater Fund | 40 | 381 | -342 | -90% |
| Sub Total – I | 91,127 | 61,846 | 29,281 | 47% |
| Growth/Equity Oriented Schemes | - | |||
| Multi Cap Fund | 1,581 | 327 | 1,254 | 384% |
| Large Cap Fund | 2,583 | 1,915 | 668 | 35% |
| Large & Mid Cap Fund | 562 | 697 | -135 | -19% |
| Mid Cap Fund | 1,068 | 1,394 | -326 | -23% |
| Small Cap Fund | 1,307 | 835 | 472 | 57% |
| Dividend Yield Fund | -36 | -25 | -11 | -42% |
| Value Fund/Contra Fund | 250 | 39 | 212 | 547% |
| Focused Fund | 795 | 1,873 | -1,078 | -58% |
| Sectoral/Thematic Funds | 214 | 321 | -107 | -33% |
| ELSS | 827 | 737 | 89 | 12% |
| Sub Total - II | 9,152 | 8,113 | 1,040 | 13% |
| Hybrid Schemes | - | |||
| Conservative Hybrid Fund | -219 | -284 | 65 | 23% |
| Balanced Hybrid Fund/Aggressive Hybrid Fund | -879 | 674 | -1,553 | -230% |
| Dynamic Asset Allocation/Balanced Advantage | 857 | 1,324 | -467 | -35% |
| Multi Asset Allocation | 93 | 91 | 2 | 2% |
| Arbitrage Fund | 5,703 | 5,810 | -107 | -2% |
| Equity Savings | -607 | -221 | -386 | -175% |
| Sub Total - III | 4,947 | 7,393 | -2,447 | -33% |
| Solution Oriented Schemes | ||||
| Retirement Fund | 107 | 122 | -15 | -12% |
| Childrens Fund | 37 | 33 | 3 | 10% |
| Sub Total – IV | 144 | 155 | -11 | -7% |
| Other Schemes | - | |||
| Index Funds | 346 | 224 | 121 | 54% |
| Gold ETF | 145 | -18 | 163 | 923% |
| Other ETFs | -1,718 | 12,353 | -14,071 | -114% |
| Fund of funds investing overseas | 42 | 61 | -19 | -31% |
| Sub Total – V | -1,184 | 12,621 | -13,805 | -109% |
| Close Ended Schemes | - | |||
| Income/Debt Oriented Schemes | - | |||
| Fixed Term Plan | -1,328 | -1,764 | 436 | 25% |
| Capital Protection Oriented Schemes | -6 | -48 | 42 | 87% |
| Infrastructure Debt Fund | - | - | - | |
| Other Debt | -161 | -1,038 | 877 | 84% |
| Sub Total | -1,495 | -2,850 | 1,355 | 48% |
| Growth/Equity Oriented Schemes | - | |||
| ELSS | -10 | -16 | 7 | 41% |
| Others | -53 | -4 | -48 | -1144% |
| Sub Total | -62 | -21 | -42 | -201% |
| Other Schemes | - | |||
| Total B – Close ended Schemes | -1,558 | -2,870 | 1,313 | 46% |
| Interval Schemes | - | |||
| Income/Debt Oriented Schemes | -89 | -90 | 1 | 1% |
| Growth/Equity Oriented Schemes | - | -79 | ||
| Other Schemes | - | |||
| Total C – Interval Schemes | -89 | -169 | 80 | 47% |
| Grand Total (A + B + C) | 1,02,538 | 87,088 | 15,451 | 18% |
| Fund of Funds Scheme (Domestic) | 664 | |||
Source: AMFI
