Getty ImagesNEW DELHI: Equity inflows crashed during June due to outflows in multicap and largecap funds while SIP inflow came below Rs 8,000 crore level after 18 months as Covid-19 pandemic hit cash flows of investors.
As per Association of Mutual Funds in India (AMFI) data released on Wednesday, SIP inflows in June fell to Rs 7,927.11 crore from Rs 8,123.03 crore in the previous month, a drop of 2.4 per cent.
Total number of SIP folios saw a marginal jump to 3.23 crore from 3.20 crore. The assets under management (AUM) from SIPs rose to Rs 3 lakh crore from Rs 2.76 lakh crore.
“The small dip in SIPs is largely due to Covid. The cash flows could have gotten affected. The industry also has provided a SIP pause facility, which has resulted in marginal dip in flows” said N Venkatesh, Chief Executive at Amfi.
Net inflows into equity mutual funds, which were at Rs 5,256 crore in May, crashed further to Rs 240.55 crore in June, a plunge of over 95 per cent. Investors withdrew a net Rs 777.60 crore from multicap funds while large cap funds saw outflows of Rs 212.78 crore. ELSS, sectoral and focussed funds, however, saw some inflows.
“ELSS as a category has seen higher AUM, thanks to the extensions provided by the authorities for investment in tax saving instruments. SIP contribution has been slowing down is worrying, but it is not completely unexpected given the strain on cash flows and incomes experienced by many investors on account of the COVID 19 situation. Once the economic situation improves, the flows should also pick up,” said G Pradeepkumar, CEO at Union AMC.
The sharp dip in inflows have come at the time when benchmark indices surged thanks to abundant liquidity in the market. Sensex gained 7.68 per cent in June while BSE Midcap soared 10.23 per cent and BSE Smallcap index 13.66 per cent.
“Some people may have booked profit as the market picked up in June, which they should not do because mutual funds are investment vehicles for long term and not timing the market. Maybe they are now waiting on the sidelines to enter at an appropriate time,” Venkatesh reasoned.
Drop in inflows, however, did not impact the DII buying during the last month as domestic institutional investors that largely constitute mutual fund houses bought shares worth Rs 4,910.86 crore. However, this was significantly lower than purchase of shares worth Rs 11,356 crore in the previous month.
AMFI data showed that there was a net inflow of just Rs 7,265.68 crore in mutual funds largely on accounts of investors withdrawing money from liquid funds, which is a quarter-end phenomena.
Liquid funds saw an outflow of Rs 44,226.23 crore while low duration fund and corporate bond fund saw an inflow of Rs 12,235 crore and Rs 10,737 crore. Credit risk funds continued to see outflows as investors withdrew further Rs 1,500 crore from the category.
The total assets under management (AUM) at the end of June jumped to Rs 25.48 lakh crore from Rs 24.54 lakh crore, largely on mark-to-market gains. Apart from the above mentioned categories, other ETFs and arbitrage funds saw healthy inflows.
As per Association of Mutual Funds in India (AMFI) data released on Wednesday, SIP inflows in June fell to Rs 7,927.11 crore from Rs 8,123.03 crore in the previous month, a drop of 2.4 per cent.
Total number of SIP folios saw a marginal jump to 3.23 crore from 3.20 crore. The assets under management (AUM) from SIPs rose to Rs 3 lakh crore from Rs 2.76 lakh crore.
“The small dip in SIPs is largely due to Covid. The cash flows could have gotten affected. The industry also has provided a SIP pause facility, which has resulted in marginal dip in flows” said N Venkatesh, Chief Executive at Amfi.
Net inflows into equity mutual funds, which were at Rs 5,256 crore in May, crashed further to Rs 240.55 crore in June, a plunge of over 95 per cent. Investors withdrew a net Rs 777.60 crore from multicap funds while large cap funds saw outflows of Rs 212.78 crore. ELSS, sectoral and focussed funds, however, saw some inflows.
“ELSS as a category has seen higher AUM, thanks to the extensions provided by the authorities for investment in tax saving instruments. SIP contribution has been slowing down is worrying, but it is not completely unexpected given the strain on cash flows and incomes experienced by many investors on account of the COVID 19 situation. Once the economic situation improves, the flows should also pick up,” said G Pradeepkumar, CEO at Union AMC.
The sharp dip in inflows have come at the time when benchmark indices surged thanks to abundant liquidity in the market. Sensex gained 7.68 per cent in June while BSE Midcap soared 10.23 per cent and BSE Smallcap index 13.66 per cent.
“Some people may have booked profit as the market picked up in June, which they should not do because mutual funds are investment vehicles for long term and not timing the market. Maybe they are now waiting on the sidelines to enter at an appropriate time,” Venkatesh reasoned.
Drop in inflows, however, did not impact the DII buying during the last month as domestic institutional investors that largely constitute mutual fund houses bought shares worth Rs 4,910.86 crore. However, this was significantly lower than purchase of shares worth Rs 11,356 crore in the previous month.
AMFI data showed that there was a net inflow of just Rs 7,265.68 crore in mutual funds largely on accounts of investors withdrawing money from liquid funds, which is a quarter-end phenomena.
Liquid funds saw an outflow of Rs 44,226.23 crore while low duration fund and corporate bond fund saw an inflow of Rs 12,235 crore and Rs 10,737 crore. Credit risk funds continued to see outflows as investors withdrew further Rs 1,500 crore from the category.
The total assets under management (AUM) at the end of June jumped to Rs 25.48 lakh crore from Rs 24.54 lakh crore, largely on mark-to-market gains. Apart from the above mentioned categories, other ETFs and arbitrage funds saw healthy inflows.
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