July Mutual Fund inflows steady despite market turbulence

Despite the turbulence in the market, mutual fund inflows have been largely steady. The mutual fund industry saw a total net equity inflow of Rs 8,092 crore in the month of July which translates to almost a seven percent uptick from June. This includes Rs 1,800 crore of NFO money (Kotak Focused Fund & Mirae Midcap Fund).

Given the market volatility, investors continue to favour large cap funds which have collected Rs 1,915 crore. Multi cap funds have however lost favour and just garnered Rs 327 crore versus Rs 1,835 crore in June as investors are seeking the safety of large caps and larger midcaps.

Balanced funds saw inflows at Rs 674 crore versus an outflow of Rs 1,910 crore in June. This is the first time in six months where the balanced funds reading has turned green and is thus another reflection of the market conditions where investors want the relative safety of some debt exposure alongside equity.

In the hybrid category, arbitrage funds continue to clock steady inflows at Rs 5,810 crore in July versus Rs 3,166 crore in June as investors favour this category as a more tax efficient dividend alternative to the erstwhile balanced fund category.

Liquid fund have also seen  a reversal with inflows coming in at Rs 45,441 crore versus an outflow of over Rs 1.5 lakh cores in June.

Credit risk still saw an outflow of Rs 3,411 crore which was higher than last month’s reading of Rs. 2,695 crore.

While giving his take on the headline numbers Sunil Subramaniam, MD & CEO of Sundaram MF, said, “I think it is a very good number considering that the market has been so volatile, especially post the budget. It reflects a little bit of healthiness and maturity."

Vishal Kapoor, CEO of IDFC said, “Firstly, it is very encouraging to see the systematic investment plan (SIP) data once again. It has shown a sharp uptick this month. It is telling us that the theme around retail equity participation, looking at a long term, is on track which is very heartening to see.”