Nilesh Shah of Kotak AMC says that it will be a challenge for the mutual fund industry to handle record inflows to the tune of Rs 27,000 in the equity mutual funds for the month of August. In conversation with CNBC TV18, he said “It’s a challenge to manage Rs 27,000 crores of investments in a month. We are focused on very niche segment of the market.” Even as equity markets were down by around 2% in August, equity mutual funds saw record inflows of Rs 20,362 crore, while total assets of the mutual fund industry touched a record high level and crossed the Rs 20 lakh-crore mark last month. After including other categories such as balanced funds and ETFs, the figure tops Rs 27,000 crores.
The expert believes that the cash balances with the funds are likely to increase marginally due to this massive inflow. In the current financial year, equity funds have seen net inflows of over Rs 61,421 crore, suggests the data from Amfi. For want of opportunities to deploy excess cash, industry players such as BlackRock Inc’s Indian unit in February shut its DSP BlackRock Micro Cap Fund to new investors. In April this year, Motilal Oswal Asset Management Co had stopped accepting new cash for its Next Trillion Dollar Opportunity Strategy, which mostly invests in small and mid-cap stocks, because it says the rally has made valuations untenable, according to a bloomberg report.
