Inflows in equity mutual funds hit 10-month low in August

Equity mutual funds saw a net inflow of Rs 6,120 crore in August. This is the lowest inflow equity funds have witnessed in the last 10 months. Mutual fund analysts are attributing the lower inflows to the ongoing volatility in the stock market. Equity funds saw a total inflow of Rs 8,898 crore in July, Rs 15,495 crore seen in June, Rs 18,529 crore in May and Rs 15,890 crore in April.

On the other hand, debt mutual funds witnessed an inflow of Rs 49,164 crore last month, much higher than Rs 4,930 crore seen in July. However, hybrid schemes saw a net outflow of Rs 6,601 crore and Gold Exchange Traded Funds (ETFs) experienced a net outflow of Rs 38 crore.

“Equity MF inflows, while positive, have moderated in recent months. There is usually a psychological tendency amongst domestic investors to book profits near all-time highs (especially when the markets have corrected post hitting similar levels in recent past), which is also getting reflected in the lower quantum of inflows. While MF equity flows have moderated, foreign portfolio investor flows have revived and supported equity markets,” said Arun Kumar, Head of Research, FundsIndia.

Overall, the mutual fund industry registered a net inflow of Rs 65,077 crore in August, compared to Rs 23,605 crore in July. The inflow pushed the Assets Under Management (AUM) of the industry to Rs 39.34 lakh crore at the end of August, from Rs 37.75 lakh crore at the end of July.