Debt schemes, however, posted net outflow of ₹92,247 crore in June as investors took money away, expecting further rate hikes. This resulted in the industry’s total assets under management (AUM) declining to ₹36.98 lakh crore in the month against ₹37.37 lakh crore during May.
“Net equity inflow remained resilient despite relentless selling by FPIs (foreign portfolio investors) and market correction during the year so far, reflecting a sense of maturity in investors’ mindset,” said Akhil Chaturvedi, chief business officer at
Flows through systematic investment plans fell marginally to ₹12,276 crore from ₹12,286 crore in May.
Flexicap funds, which give flexibility to fund managers to invest across the entire spectrum of the market without any restrictions saw the highest collection of ₹2,512 crore in June. This was followed by thematic funds that got ₹2,151 crore and large-cap funds with inflows of ₹1,730 crore. Low-cost passive funds, which include both equity and debt funds, saw inflows of ₹7,301 crore.
Dynamic asset allocation funds, which invest in a mix of debt and equity based on market valuations, saw inflows of ₹1,799 crore. Aggressive hybrid funds, which allocate 65-75% of their portfolio to equities, saw inflows of ₹1,130 crore. Arbitrage funds saw outflows of ₹5,593 crore.
Investors pulled out money from debt-oriented funds on fear that rate hikes will lead to mark-to-market (MTM) losses.
“An uncertain macro environment, driven by expectations around an increasing rate cycle, higher commodity prices and slowdown in growth have likely led to investors steering clear of debt funds,” said Kavitha Krishnan, senior analyst – manager research, Morningstar India.
Single-digit returns, rising bond yields and the rising inflation have also likely led to investors choosing to redeem their investments in debt funds in favour of other investment avenues, she added.
Outflows were largely driven by the overnight funds, liquid funds and ultra-short-term funds with outflows of ₹20,668 crore, ₹15,782 crore, and ₹10,058 crore, respectively.
Corporate bond funds saw outflows of ₹9,086 crore, followed by money market funds with ₹8,126 crore outflows and floater funds with ₹7,078 crore outflows.
Gold ETFs saw inflows of ₹135 crore as investors bought the yellow metal as a hedge against rising inflation.