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The difference between gross inflows and net inflows has been widening in the MF industry. Overall, net inflows are just 7% of the total gross inflows in August 2022, shows the AMFI data.
The MF industry recorded net SIP inflows of Rs.6,130 crore as against gross inflows of Rs. 12,690 crore in August 2022. The net to gross percentage is 48% in SIP but it is the lowest for the ongoing financial year.
A senior AMC official said that the marginal decline in net SIP inflows is due to large number of NFOs in the previous month. There were many NFOs last month and this could possibly be one of the reasons. Many people shift their money from non-performing schemes to NFOs.
In terms of lump sum investment, the industry reported net inflows of Rs. 60,630 crore as against gross inflows of Rs. 8.85 lakh crore. The net to gross percentage here is 7%. However, gross figures hold less relevance as any single purchase/redemption especially from liquid/overnight funds can impact the net figure, said Vinod Jain of Jain Privy Investment.
Scheme-wise Gross Inflows/Net Inflows for August 2022
AMFI data further shows that net SIP inflows in equity dipped from Rs. 6,740 crore in July to Rs. 5,063 crore in August. Vinod said, “The last one and a half years witnessed a big inflow cycle, however, redemptions have now gone up. With the rise in FD rates, investors are moving back to FDs. Also, the increase in EMIs could be a probable reason for subdued inflows.”
He added, “Overall, equity schemes have delivered 4-5% over one year as against 10-12% in the previous year. This has been affecting investor sentiments.”
Meanwhile, while net SIP inflows in debt funds increased from Rs. 93 crore in July to Rs. 168 crore in August 2022, hybrid funds saw a decline in net inflows. This could be due to the increase in investor interest in ultra-short term funds over arbitrage funds, believes the MF official.
