With equity markets reaching all-time highs, investors continue to exit equity funds for the eighth consecutive session. Meanwhile, the MF industry has witnessed net inflows in debt funds in February due to inflows in liquid funds.
N S Venkatesh, CEO, AMFI said, “Profit booking in debt schemes with bond yields moving up, and in equity schemes with market indices at all-time high is reflective of investors moving in tandem with market scenarios. Increasing preference towards hybrid schemes in the last two months, especially the arbitrage and dynamic asset allocation funds is reflective of retail investors becoming increasingly conservative, leaning towards capital preservation and moderate returns and amid acute market volatility."
Akhil Chaturvedi, Head of Sales & Distribution, Motilal Oswal MF believes some meaningful consolidation of markets could make investors come back in equity funds and make fresh allocations. “First few days of March look slightly better with the redemption velocity coming down, but we need to see how it plays through the month,” he said.
Let us look at key numbers of February 2021:
Equity schemes
- Overall, equity schemes have witnessed net outflows of Rs.4,534 crore in February. Net outflows have decreased from Rs.9,253 crore in January
- All equity funds except multi cap funds, large and midcap funds and focused funds have registered net outflows
- Flexi cap funds have seen the highest net outflows of Rs.4,497 crore while multi cap funds witnessed net inflows of Rs.4,077 crore
- Large cap funds have witnessed net outflows of Rs.1,280 crore followed by value funds of Rs.1,378 crore
- Sectoral and ELSS funds have seen net outflows of Rs.365 crore and Rs.847 crore, respectively
- Number of folios in equity funds has risen by 3.40 lakh to 6.47 crore in February
Debt schemes
- Debt funds have witnessed net inflows of Rs.1,734 crore led by inflows in liquid funds of Rs.17,301 crore followed by money market funds with net inflows of Rs.9,579 crore
- Low duration and long duration funds also witnessed net inflows of Rs.2,844 crore and Rs.12 crore respectively
- On the other hand, the industry has recorded huge net outflows in short duration funds, corporate bond funds, ultra short duration funds and dynamic bond fund
Hybrid schemes
- Hybrid funds have witnessed net inflows led by arbitrage funds with net inflows of Rs.5,033 crore followed by dynamic asset allocation funds with inflows of Rs.2,005 crore
- Conservative hybrid funds have also witnessed net inflows
- On the other hand, aggressive hybrid fund, multi asset allocation fund and equity savings fund have recorded net outflows
SIP trend
- SIP inflows have witnessed a decline as SIP inflows decreased to Rs.7,528 crore in February from Rs.8,023 crore in January
- In addition, SIP folios grew to 3.63 crore in February from 3.56 crore in January
- Overall, SIP AUM has increased to Rs.4.21 lakh crore in February from Rs. 3.90 lakh crore in January
- The monthly SIP contribution for February 2021 has come down by Rs.495 crore due to less number of days in February. “The shortfall would get accumulated and reflected in March 2021 monthly data,” said N S Venkatesh, CEO, AMFI
Broad trend
- Overall, the MF industry has witnessed net inflow of over Rs.4,090 crore
- The total industry AAUM has risen to Rs.32.29 lakh crore in February from Rs.31.84 lakh crore in January
