Net Equity Flows To Mutual Funds Undeterred Amid October Market Rout

Retail investors continued their investments in mutual funds in October, despite the biggest monthly correction in 54 months. Net flows into equity schemes by retail investors into mutual funds stood between Rs 30,000 crore to Rs 35,000 crore during the month. October saw 33 new equity fund offers, with two-third of them being index fund schemes. Gross equity flows has been in the range of Rs 58,000-60,000 crore with redemptions in the range of Rs 25,000-Rs 30,000 crore during October.

Despite lesser number of new thematic new fund offers during the month, retail investors continued to allocate funds, industry insiders told NDTV Profit. The data is not being made public by the Association of Mutual Fund of India.

Retail investors continued with their flows into systemic investment plans, despite the benchmark indices correcting over 6% in the month of October, worst correction in 54-months. The benchmark indices are nearly 10% lower from their all-time high levels.

New registrations of SIPs continued to be in the range of 40-45 lakh during the month, similar to September, and there seems to be no change in investor behaviour, people familiar with the matter told NDTV Profit. A change in retail allocation is normally seen during sustained volatility and October alone is too short a time duration for such a change, the people said. Retail investors normally wait for end of the month or quarter to assess and decide on change in allocation.

It is important to monitor the flows in November and December, said one of the insider.

Lumpsum investments from retail investors too haven't seen much impact during the month, the person cited above said. Sectoral and thematic schemes continue to attract one-third of the net flows followed by Multi/Flexicap, midcap, and small cap schemes.

Mutual funds have net invested close to $11 billion in equity markets in the month of October alone.

Mutual Funds net inflows stood at over Rs 94,000 crore in the month of October, highest monthly net inflows by the domestic institution so far, according to data disclosed by Securities and Exchange Board of India. This is nearly three times the net inflows in the previous months. This compares to net outflows of Rs 1.30 lakh crore by foreign portfolio investors in the secondary markets in the last 26 trading sessions.