New Delhi, Dec 11 (PTI) After three months of slowing flows, equity mutual funds recorded a sharp rebound in November with inflows climbing 21 per cent to Rs 29,911 crore, buoyed by a supportive macro
environment and resilient corporate earnings.
This improvement in flows also lifted the broader industry’s asset base, with total assets under management rising to Rs 80.80 lakh crore in November from Rs 79.87 lakh crore in October, according to data released by industry body Amfi on Thursday.
“Equity-oriented schemes continued to drive growth, supported by sustained inflows. Hybrid and passive funds also saw healthy traction, with multi-asset and arbitrage funds together accounting for over 70 per cent of hybrid category flows,” Venkat N Chalasani, CEO of Amfi, said.
However, retail participation via systematic investment plans (SIPs) showed marginal softness, with SIP inflows easing to Rs 29,445 crore from Rs 29,631 crore in October.
Despite this dip, overall equity inflows strengthened, rising to Rs 29,911 crore in November from Rs 24,690 crore in the previous month, the data showed.
Flows, however, remain about 17 per cent lower year-on-year, and well below Rs 30,421 crore registered in September, Rs 33,430 crore in August and Rs 42,702 crore in July.
Market experts caution that while the month-on-month improvement signals firmer investor sentiment, sustaining the momentum will be important.
The growth reflected sustained “investor confidence amid a supportive macro environment, resilient corporate earnings, and improving clarity around the global interest-rate trajectory”, Himanshu Srivastava, Principal Research at Morningstar Investment Research India, said.
Within the equity segment, most sub-categories saw positive traction.
Flexi-cap funds continued to dominate with Rs 8,135 crore in inflows, though slightly lower than October’s Rs 8,929 crore.
Large & Mid-cap funds followed at Rs 4,503 crore, while Dividend Yield and ELSS funds were the only categories to record net outflows of Rs 278 crore and Rs 570 crore, respectively.
In contrast, debt mutual funds saw an outflow of Rs 25,692 crore in November after receiving a hefty inflow of Rs 1.6 lakh crore in the preceding month.
The pullback was driven largely by withdrawals from highly liquid categories as institutional investors redeemed funds ahead of mid-quarter payment obligations and amid tightening system liquidity, Nehal Meshram, Senior Analyst-Manager Research at Morningstar Investment Research India, said.
Overnight funds saw outflows of Rs 37,624 crore, while liquid funds recorded redemptions of Rs 14,051 crore.
At the same time, investors shifted toward higher-yielding but relatively stable categories such as Money Market (Rs 12,822 crore), Ultra Short Duration (Rs 9,068 crore) and Low Duration Funds (Rs 5,800 crore).
“These categories offer stable carry without material duration risk, making them attractive amid uncertainty over the rate path. In addition, this could also mean some rotation and positioning ahead of the MPC policy review in early December,” Umesh Sharma, CIO Debt at The Wealth Company Mutual fund, said.
Gold ETFs, meanwhile, saw a notable slowdown in momentum as net inflows dropped to Rs 3,742 crore from Rs 7,743 crore in October, pointing to a moderation in demand for safe-haven assets. PTI SP SHW
