Inflows into equity MFs decline in Oct
OVERALL, THE INDUSTRY SAW AN INFLOW OF ₹1.33 LAKH CRORE ACROSS ALL FUND PRODUCTS, VERSUS AN OUTFLOW OF ₹1.51 LAKH CRORE IN SEPTEMBER
NEW DELHI/MUMBAI: Inflows into Indian stock funds declined to the lowest since May even as the $2.1 trillion equity market rose for the second straight month in October.
Stock plans received ₹6,020 crore last month, according to the Association of Mutual Funds in India (Amfi). That’s 9% less than what they got in September and the smallest inflow since May.
While India’s key equity indexes have risen to records this month on optimism over better-than-expected company earnings, the rally has yet to spread to the broader market where retail investors typically focus. The gains also don’t square with ground realities, as large parts of the country’s economy still appear to be in distress.
“Markets are high but the same is not being reflected in broad category of funds,” said Vidya Bala, head of research and co-founder at Chennai-based Primeinvestor.in. “Economic indicators must turn positive and the rally should start reflecting in the broader market for investors to develop confidence.”
Still, monthly contributions from investors into stock funds remained steady for the third straight month at about ₹8,000 crore, Amfi data showed.
“We expect the stock market to do well and corporate earnings to be better, and as such equity funds should do reasonably well,” said NS Venkatesh, chief executive officer at Amfi. “We have maintained a steady momentum of flows from the retail investors.”
Overall, the industry saw an inflow of ₹1.33 lakh crore across all fund products, compared with an outflow of ₹1.51 lakh crore in September. The liquid or money market category contributed the most to the total inflows.
Himanshu Srivastava, senior analyst, manager research, Morningstar Investment Advisers India said net inflows continue to pour into the equity-oriented mutual fund schemes tracking the surge in the domestic markets. In the month of October, the category received slightly lower inflow compared to September. The inflow indicate building up of a positive investment trend.
“Series of steps taken by the government in the recent times to boost domestic economy had improved sentiments and helped the markets to surge. This has helped investors slowly gain confidence and get back to investing. Additionally, the steady flow through SIP (systematic investors plan) is also keeping the momentum going,” he added.
Gold exchange-traded funds saw an outflow of ₹31.45 crore after witnessing inflow in the preceding two months. The safehaven asset saw an infusion of ₹44 crore in September and ₹145 crore in August.
Inflows in mutual funds (MFs) through SIPs in October stood at ₹8,246 crore, a slight fall as compared with ₹8,263 crore a month ago.
G Pradeepkumar, chief executive, Union Asset Management Co. said, SIP flows have remained robust even in the face of continued volatility in the market which augurs well for the mutual fund industry as well for the broader markets.