Mutual Funds: June, despite the market slump, equity MFs receive Rs 15,500 crore inflows


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Mumbai: Retail investorsContinued confidence in equity Mutual fundsDespite the sharp fall of both Indian and international markets, there was no shortage of activity last month. EquitySchemes witness net Inflows of ₹15,498 crore in the month, shows data from the Association of Mutual Funds in India. This, though, was lower than ₹18,529 crore inflows in May.

Debt schemes, however, posted net outflow of ₹92,247 crore in June as investors took MoneyWe expect further rate increases and we are leaving. 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.

Akhil Chakravedi, chief executive officer at Akhil Chaturvedi said, “Net equity inflow remained robust despite relentless selling of FPIs [foreign portfolio investors] and market correction during this year so far. This is reflecting a feeling of maturity in investors’ mindset.”

Mutual Fund

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.

Fearing rate increases would lead to losses (MTM), investors pulled money out of debt-oriented funds.

“An uncertain macro-environment, driven by expectations around an increase rate cycle, higher commodity price, and slowdown of growth, have likely led investors to steer clear of debt funds,” Kavitha Krishnan – senior analyst – manager research, Morningstar India.

She added that single-digit returns and rising bond yields have likely led investors to choose other investment avenues over debt funds.

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.


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