Inflows into equity mutual funds fell as uncertainties around the ongoing geopolitical unrest, soaring inflation and foreign selloff persist.
Net investments into equity and equity-linked schemes fell 16% over the previous month to Rs 15,497.7 crore in June, according to data released by the Association of Mutual Funds in India. That’s the sixteenth straight month of investments into such stock plans.
Indian equity benchmarks declined for the third consecutive month in June. The S&P BSE Sensex fell 4.3%, while the NSE Nifty 50 lost 4.5% during the month.
Category-Wise Trends
All segments witnessed inflows in June.
Multi caps witnessed the least investments among all categories, while large caps saw the most.
AMFI started reporting granular data since April 2019.
SIP Contribution
Monthly contributions into systematic investment plans stayed above Rs 12,000 crore for the second month in a row, but less than the record high touched in March.
The overall outflows seen in June were expected, said NS Venkatesh, chief executive officer at AMFI. “Since it was a quarter-end month, corporates take out money and bankers square off investments. The negative numbers are understandable.”
Due to rate hikes by the Reserve Bank of India, he said investors are taking money out from short duration funds. Also, all equity mutual funds saw positive numbers despite very high volatility, which is a “positive sign”.
Debt Funds
Liquid funds witnessed outflows after two straight months of investment. Such schemes are used by companies to park short-term cash and usually see a spike in redemption at the end of a quarter.
Investors withdrew from credit risk funds for the seventh straight month in June.
Net Flows
All mutual fund schemes, debt and equity, saw outflows, dragged by liquid funds, ultra-short duration funds, corporate bond funds, money market funds and overnight funds.
Money market funds saw outflow of Rs 8,126.1 crore in June against an inflow of Rs 14,598.6 crore in May.
The average assets under management stood at Rs 36.98 lakh crore versus Rs 37.3 lakh crore in May. Net AUM, too, fell to Rs 35.64 lakh crore from Rs 37.2 lakh crore in the previous month.
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