Equity MFs see first outflow in 4 years as investors turn cautious

Equity mutual funds witnessed an outflow of Rs 2,480 crore in July, making it the first withdrawal in more than four years, primarily on profit-booking by investors.

Overall, the mutual fund industry witnessed a net inflow of Rs 89,813 crore across all segments last month, much higher than Rs 7,265 crore seen in June, data by Association of Mutual Funds in India (Amfi) showed. This inflow could be attributed to infusion in liquid funds and low duration funds.

Outflow from equity and equitylinked open ended schemes was at Rs 2,480.35 crore in July as compared to an inflow of Rs 240.55 crore in June.

Such schemes had attracted Rs 5,256 crore in May, Rs 6,213 crore in April, Rs 11,723 crore in March, Rs 10,796 crore in February and Rs 7,877 crore in January.

July 2020 saw the first outflow since March 2016, when equity schemes witnessed a pull out of Rs 1,370 crore. In July this year, except for ELSS and focused fund categories, all the other equity categories witnessed net outflow.

Amfi Chief Executive N S Venkatesh attributed outflow from equity-oriented funds to withdrawal from multi-cap and large cap funds due to profit-booking by investors.

"Equity-oriented mutual funds witnessed their first major monthly net outflow in a long time. Multi-cap fund category was the worst hit followed by mid-cap and value fund categories," said Himanshu Srivastava, Associate Director- Manager Research at Morningstar India.