Net inflows in equity funds bounce back in June 2019

By Ravi Samalad |  08-07-19 | 
 
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Ravi Samalad is Assistant Manager - Editoral for Morningstar.in.

Net inflows in equity funds jumped by 42% from Rs 5,407 in May 2019 to reach Rs 7,663 crore in June 2019, shows the latest Association of Mutual Funds in India data.

A large chunk of the inflows flowed in multi cap and large cap funds which collectively mopped up Rs 3,345, accounting for 44% of the total net inflows of Rs 7,663 in equity category.  In May 2019, 50% of the total net inflows came in mid and small cap funds.

 

Hybrid Schemes

Inflows in hybrid schemes dropped by 32% to Rs 863 crore in June as compared to net inflows of Rs 1,266 crore in May. Balanced Hybrid Fund, Conservative Hybrid Fund and equity savings funds saw combined net outflows of Rs 2,762 crore in June 2019.

Liquid

Liquid category witnessed the highest net outflow at Rs 1.52 lakh crore. Barring Floater Fund, Gilt Fund, Banking and PSU and long duration, all other categories witnessed net outflows in June 2019.  The total net outflows from debt category stood at Rs 1.71 lakh crore. Debt funds AUM stood at a little over Rs 10 lakh crore.

Himanshu Srivastava, Senior Research Analyst, Morningstar Investment Advisers India,  attributed to the ongoing liquidity squeeze in the markets along with advance tax payment obligations for huge outflows from liquid funds. "Going ahead, SEBI’s new regulation on liquid schemes with regards to investment limitations, valuation and implementation of an exit load could impact flows. Further, categories like credit risk, short & medium duration funds continued to witness outflows due to the prevailing negative sentiment around credit risk in the fixed income markets."

Overall, the industry’s asset base fell by 6% from Rs 25.93 lakh crore in May to Rs 24.25 lakh crore in June, largely on account of outflows from liquid funds.

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