Mutual funds continued to see a slowdown in the inflows in equity schemes for the third consecutive month in January with the quantum of such flows falling to the lowest level in 10 months.
According to the Association of Mutual Funds in India (AMFI) equity schemes saw net inflows of ₹4,914 crore in Janaury, lower than previous month’s inflows of ₹5,765 crore. Incidentally, this was the lowest monthly inflows since March 2018 when such schemes saw flows of ₹2,954 crore.
Industry participants attribute the slowdown in flows to a combination of factors, including market volatility and global economic scenario. “There is a little bit of slowdown. Market volatility has been persisting for the last 3-4 months with elections round the corner. Global economic scenario has also not been great so people are waiting on the sidelines,” said N. S. Venkatesh, chief executive officer, AMFI.
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Rise in folios
Meanwhile, the overall assets under management of the mutual fund industry rose to ₹23.37 lakh crore in January from the previous month’s ₹22.85 lakh crore. The number of folios also rose from 8.03 crore to 8.09 crore in the same period with the share of retail folios also rising.
“Despite acute market volatility owing to credit events and global uncertainty, retail investors continue to repose their faith in the India growth story. This is quite evident from the SIP flows and folio numbers, which continue to rise sequentially,” said Mr. Venkatesh.
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On an overall basis, the mutual fund industry saw inflows of ₹65,439 crore in January, as against outflows of almost ₹1.37 lakh crore in the previous month. In December, the outflows were primarily driven by liquid and money market schemes that typically see huge outflows at the end of a quarter due to advance tax payment obligations of corporates.
Against an outflow of ₹1.49 lakh crore in the liquid and money market schemes in December, the category saw an inflow of ₹58,637 crore in January, AMFI said.