Equity mutual fund inflows fell 9 per cent month-on-month to Rs 30,421 crore in September, marking the second straight month of decline, according to data released by the Association of Mutual Funds in India
(AMFI) on Friday.
Despite the slowdown, this was the 55th consecutive month of net inflows into equity schemes. In comparison, inflows stood at Rs 33,430 crore in August and Rs 42,702 crore in July.
Among categories, flexi-cap funds led the pack with inflows of Rs 7,029 crore, followed by mid-cap funds at Rs 5,085 crore and small-cap funds at Rs 4,363 crore. Large-cap funds attracted Rs 2,319 crore during the month.
The debt fund segment, however, saw heavy outflows of Rs 1.02 lakh crore in September, compared to withdrawals of Rs 7,980 crore in August.
Overall, the mutual fund industry reported a net outflow of Rs 43,146 crore in September, reversing an inflow of Rs 52,443 crore seen in August. The industry’s assets under management (AUM) rose slightly to Rs 75.61 lakh crore at the end of September from Rs 75.12 lakh crore in August.
Ankur Punj, managing director and business head at Equirus Wealth, said, “We saw a drop in equity MF net inflows in September. This is the second consecutive monthly decline in monthly net flows and can be attributed to geopolitical uncertainties. Investor participation remains robust with mid- and small-cap funds leading inflows with Rs 5,085 crore and Rs 4,362 crore, respectively. It clearly reflects investor sentiment in the higher risk segment, though the broader market remains volatile.”
Flexi-cap and diversified equity funds saw continued inflows. However, there was a sharp drop in sectoral and thematic funds, which is a reflection of volatility in equity markets, he added.
“SIPs continue to remain a strong driver for inflows in equity markets and show the confidence that retail investors have in India’s long-term growth story. Going forward, it will be prudent for investors to balance out their portfolios and follow an asset allocation strategy. Having high mid- and small-cap funds exposure in portfolios could add unwanted volatility in portfolios. Hybrid/ multi-asset and large-cap fund exposure should be increased during volatile times. Use SIPs for disciplined and long-term investments to ride over short-term volatility,” Punj said.
