Equity funds witness over Rs 10,000 crore inflows in Feb, highest in FY2019-20

Equity funds have witnessed more than Rs.10,000 crore of net inflows in February, the highest in FY 2019-20. These inflows have come even as equity markets saw a sharp correction with both Nifty 50 and BSE Sensex plunging by more than 6% in February.

Overall, the total equity net inflows grew by 37% to Rs 10,795 crore in February from Rs 7,877 crore in January.

Among equity schemes, sectoral/thematic funds category witnessed the highest net inflows. The category witnessed Rs 1,927 crore of net inflows as against Rs 4 crore in January. Over Rs 1,700 crore net inflows came via NFO of Axis ESG Equity Fund.

Next in the list is multi cap fund category followed by large cap funds. Multi cap funds saw net inflows worth Rs 1,624 crore and large cap funds worth Rs 1,606 crore. Small cap funds also remained one of the sought after categories with net inflows of Rs 1,498 crore compared to Rs 1,072 crore in January.

Moreover, ELSS schemes continued to find favour with individual investors, with positive net flows at Rs 871 crores during February, despite Budget 2020-21 proposing an alternate tax structure.

Data available on SIPs also remained encouraging, especially taking into consideration the correction in equity markets amid concerns over coronavirus outbreak and slowdown in Indian economy.

Monthly SIP flows stood at Rs 8,513 crore in February as against Rs 8,532 crore in January. Number of SIP accounts grew by 5.65 lakh folios in February taking the total count to 3.09 lakh crore. The total SIP AUM stood at Rs 3.11 lakh crore as on February.

As on February, AUM of the MF industry stood at Rs 27.23 lakh crore, as against Rs 27.86 lakh crore in January. The decline is largely due to mark-to-market effect following market correction. However, the average AUM in February touched an all-time high at Rs 28.29 lakh crore.  

N S Venkatesh, CEO, AMFI said, “Continued vibrancy in monthly SIP flows and net inflows in to equity funds have resulted in MF AAUM achieving the all-time high milestone. Market indices have grown year-on-year by 6% against the 15% jump in MF industry AUM. We expect continued buoyancy in SIP flows in March too, though a few institutional investors may reassess their investment strategy, given the deep correction in markets.’’

''Individual investors continue to repose trust in the equity market, investing through mutual funds via the SIP route and I am happy to note that SIP monthly contributions have breached the INR 8,000 crore mark for the 15th consecutive month” he added.

Meanwhile debt funds witnessed an outflow worth Rs 27,939 crore as against Rs 1.09 lakh crore in January, primarily due to outflows in liquid funds and overnight funds. Liquid funds saw a net outflow of Rs 43,825 crore as against Rs 59,682 crore of inflows in January. Overnight funds witnessed net outflow of Rs 1,473 crore.

Categories like low duration fund, money market fund, short duration fund and banking & PSU funds continued to receive good inflows. Fund managers attribute these inflows to investors’ continued preference for high quality and short-end categories having minimum credit and duration risk.