Due to rise in SIP contribution and net inflows in debt funds, the MF industry’s AUM has reached Rs.28.22 lakh crore as on October 2020, shows the latest AMFI data.
On the other hand, equity funds have witnessed net outflows for the four consecutive months. Benchmark indices Sensex and Nifty surged about 4% in October leading to profit booking by investors.
G Pradeepkumar, CEO, Union MF said, "The continued rally in equity markets combined with the expectation of volatility around US elections appear to have led some investors to book profits in equity and move to short term debt funds. Many of them may come back to equity funds if there is a correction. The SIP book has shown a growth over the previous month which is very encouraging from a retail flow perspective."
NS Venkatesh, CEO, AMFI said, "Rise in both SIP contribution and SIP AUMs during October 2020 and continued slowing outflow in equity schemes reinforces the retail investor confidence in the mutual fund as an asset class. This trend is reflective in economy improving further with green shoots amply visible – attractive interest rates, rise in GST collections, digitalisation-driven efficiencies making Indian corporates healthier, conducive GoI policy for attracting FDI and continued surge in FII investment coupled with favourable geo-political scenario would continue to keep Indian equity markets an attractive investment destination over a long term."
Let’s look at key highlights of October 2020:
Equity schemes
• Overall, equity schemes have witnessed net outflows of Rs.2,724 crore in October compared to Rs.734 crore outflow in September
• Most outflows in equity funds were due to net outflows from multi cap funds of Rs.1,902 crore followed by Rs.1,201 crore in value funds. Net outflows in multi cap funds were also due to confusion around SEBI’s new norms for multi cap funds
• Net outflows were also seen in large cap funds, mid cap funds, small cap funds, dividend yield fund, focused fund and ELSS
• Interestingly, the industry has witnessed net inflows in sectoral funds and large and mid cap funds
Debt schemes
• Overall, debt schemes have seen net inflow of Rs.1.10 lakh crore led by liquid funds and short duration funds
• Barring credit risk fund and long duration fund, all other debt oriented funds have witnessed robust inflows
• Short duration categories such as ultra-short duration, low duration and money market funds have received good traction. Each category has recorded net inflow of over Rs.10,000 crore
Hybrid schemes
• Hybrid schemes have witnessed net outflow of Rs.1,600 crore due to redemptions from balanced advantage funds
• While balanced advantage fund has seen a net outflow of Rs.2,300 crore, arbitrage fund saw an inflow of Rs.1,700 crore
• All other hybrid funds like conservative hybrid fund, balanced advantage, multi asset allocation and equity savings have recorded net outflows
SIP trend
• SIP folios grew marginally to 3.37 crore in October from 3.33 crore in September
• This led to a rise in monthly SIP contribution to Rs.7,800 crore compared to Rs.7,788 crore in September
• All in all, SIP AUM rose to Rs.3.42 lakh crore in October from Rs.3.35 lakh crore in September
Broad trend
• The MF industry has witnessed net inflows of Rs.98,575 crore
• The total industry AAUM has risen to Rs.28.33 lakh crore in October from Rs.27.78 lakh crore in September
