Inflows into equity MFs fall 76% on month in Nov to Rs 2,258 crore

Mumbai: Inflows into equity mutual funds fell 76% month on month to ₹2,258 crore last month from ₹9,390 crore in October with several investors booking profits as broad equity indices touched lifetime highs, data from Association of Mutual Funds of India (AMFI) show.

This is the lowest inflow into equities since February 2021.

However, monthly inflows through systematic investment plans (SIP) hit a new high of ₹13,307 crore, up ₹265 crore compared to October number.

Average assets under management (AUM) of the industry rose to ₹40.49 lakh crore from ₹39.53 lakh crore in the previo

us month, largely on account of mark-to-market gains due to rising equity markets.
“As markets hit all-time high, investors are taking some profits and looking to re-enter on a correction,” said G Pradeepkumar, CEO of Union Mutual Fund. “Some part of this money will also come back in the coming months, partly through some of the new fund offers where investors could find some interesting opportunities,” he said.

During the month, there was higher interest amongst investors in the mid- and small-cap space with these categories receiving inflows of Rs 1,176 crore and Rs 1,378 crore, respectively, as per AMFI data.

However, investors booked profits in large-cap and flexi-cap funds where there were outflows of ₹1,039 crore and ₹863 crore, respectively.

In the debt space, overnight funds saw outflows of ₹31,928 crore and short duration funds saw withdrawals of ₹1,914 crore.

Investors allocated more to liquid and money market funds with these categories getting inflows of ₹34,276 crore and ₹4,942 crore, respectively, in November.

“These funds invest in very short duration and liquid securities and will not be adversely affected even if rates were to go up. They help you beat inflation and earn 6-7%,” said Sandeep Bagla, CEO of Trust AMC.

The index funds category, which includes passive equity and debt funds, saw inflows of ₹8,602 crore as investors added to low-cost passive target maturity funds, which give visibility of returns and indexation benefits.

Dynamic asset allocation funds, which invest in a mix of debt and equity based on market valuations, saw outflows of ₹1,594 crore last month, while aggressive hybrid funds, which allocate 65-75% of their portfolio to equities, saw outflows of ₹534 crore.

Arbitrage funds saw outflows for the sixth consecutive month of ₹4,075 crore, as low returns from this category led to investors preferring liquid funds where they can earn 6%.

Gold exchange-traded funds (ETFs) saw outflows of ₹195 crore in November as investors booked profit in the yellow metal after a 11% rally in one year.

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