Eq­uity Funds See a Dip in Nov In­flows

To­tal as­sets of mu­tual funds surge to ₹ 24 lakh crore, liq­uid & money mar­ket funds lead way

The Economic Times - - Markets: Beating Volatility - Our Bureau

Mum­bai: Novem­ber was a mixed month for mu­tual funds, with in­flows into eq­uity funds slow­ing even as liq­uid funds saw a re­vival in in­ter­est af­ter the NBFC cri­sis showed signs of eas­ing.

Dur­ing the month, over­all as­sets surged by `1.42 lakh crore to touch ₹ 24.03 lakh crore, buoyed by strong in­flows of ₹ 1.36 lakh crore into liq­uid and mon­ey­mar­ket funds.

How­ever, in­flows into eq­ui­ty­ori­ented mu­tual funds, which in­clude ELSS and balanced funds, stood at ₹ 8,629 crore — the low­est in this cal­en­dar year. In Oc­to­ber, in­vestors had put in ₹ 13,141 crore and in Jan­uary in­flows from these funds were at ₹ 23,005 crore.

“The Di­wali sea­son, ad­just­ments to the new bro­ker­age struc­ture…and cau­tion from large in­vestors ahead of the state elec­tion re­sults led to lower in­flows into eq­uity-ori­ented mu­tual funds,” said Vishal Kapoor, chief ex­ec­u­tive of­fi­cer,

IDFC Mu­tual Fund.

Sebi banned up­front bro­ker­age pay­ments in mu­tual funds ef­fec­tive Oc­to­ber 22. Bank dis­trib­u­tors that had worked on up­front pay­ment of com­mis­sions re­worked their com­mis­sion struc­ture with fund houses, and this took time to be im­ple­mented across the branches, af­fect­ing sales.

How­ever, de­spite the dip in flows, in­vestors con­tin­ued to pour money into sys­tem­atic in­vest­ment plans (SIPs), through which in­flows in Novem­ber stood at ₹ 7,985 crore, the same level as the pre­vi­ous month. In­vestors have added ₹ 80,645 crore through SIPs in the first 11 months of this cal­en­dar year.

Balanced funds, which in­vest in a mix of debt and eq­uity, saw in­flows dip to ₹ 215 crore, the slow­est in the past one year. “While in­ter­est rates rose, in­vestors have re­al­lo­cated money from balanced funds to other cat­e­gory of funds,” said NS Venkatesh, CEO, AMFI.

With the NBFC cri­sis eas­ing, in­vestor con­fi­dence in debt funds is re­turn­ing. This is ex­pected to gain mo­men­tum af­ter the cen­tral bank pol­icy that ap­pears to in­di­cate no im­me­di­ate in­crease in rates.

“With the NBFC scene clear­ing, in­vestor con­fi­dence has in­creased in debt funds, and some banks and cor­po­rates have started com­ing back to liq­uid funds,” said Swarup Mo­hanty, CEO, Mi­rae As­set Mu­tual Fund.

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