Equity mutual fund inflows drop in October — SIP contribution crosses Rs 13,000 crore mark

The equity mutual funds inflows dropped month on month to Rs 9,390 in October, data released by the Association of Mutual Funds in India (AMFI) said. The net flows stood at Rs 14,077 crore in September.

All equity mutual fund categories saw net inflows except the dividend yield funds that saw net outflows. Flexi cap funds and large cap funds accumulated the highest inflows.

In case of debt schemes, the outflow dropped sharply in October to Rs 2,817 crore from Rs 65,372 crore in September.

Index fund net flows were Rs 5,075 crore, and other ETFs recorded Rs 4,845 crore of net flows. The other schemes category saw positive inflows in all 10 months of this calendar year, with Rs 139,237 crore of net flows.

The Systematic Investment Plan (SIP) contribution crossed 13,000 crore mark. October monthly data showed SIP contribution of Rs 13,041 crore compared to Rs 12,976 crore.

MF folios crossed all-time high and retail MF folios too stood at all-time high, AMFI said.

Mutual Fund folios have been continuously crossing the highest ever milestone since the last two months. This indicates a healthier and disciplined investment habit and systematic mode of investment by small investors.

Sharing views on the October monthly data, N S Venkatesh, Chief Executive, AMFI said: “Markets continue to react to the global factors and domestic rate hikes. However, Mutual Fund investors have shown resilience and continue to invest in SIPs, with consistent contribution month on month. There is growth in overall equity AUM and Folios too."

"While the volatility in markets continues, as the benchmark indices are currently placed at a throwing distance from their lifetime highs, investors have reposed faith in Indian stock markets and continue to opt for equity investments through direct equity, as well as systematic investment plans of mutual funds," said Gopal Kavalireddi, Head of Research at FYERS.

A total of 31 schemes were launched in October, out of which 28 schemes are open ended and 3 are close ended schemes, introduced in various categories with total funds mobilised Rs 5,439 crore, AMFI said.

There was marginal growth in Gold ETF in the month of October with an AUM of Rs 19,881 crore.

Commenting on the same, Shweta Rajani, Head – Mutual Funds at Anand Rathi Wealth Limited, "The last few months of net flow data clearly show the maturity of investors as there has been a continuous net buying of equity irrespective of the short-term turbulence in the equity market. Moreover, the domestic fundamentals remain good, with second-quarter corporate earnings coming in line with market expectations and various indicators showing improvement in economic activity. It makes sense for an investor to build their equity portfolios by taking advantage of market volatility."

Seconding Rajani's views, Kislay Upadhyay, smallcase Manager and Founder of FidelFolio Investments said that optimism can be seen among investors with India being the fastest growing large economy amidst global slowdown.

"This optimism for growth is reconfirmed as reasonable risk appetite continues, with 50 percent of total new folio additions in Mid and Small Cap schemes, only 9 percent in Large Cap. About one third of equity net inflows came into mid cap and small cap schemes, only 2 percent in large cap. Sectoral/thematic schemes also continue to garner inflows (29 percent of net inflows) and folio additions," he said.