Mutual funds see dip in equity scheme inflows

Gold ETFs shimmer, debt funds surge

Mutual funds (MFs) saw a dip in equity scheme inflows in May compared with the previous month as net flows through systematic investment plans (SIPs) also contracted marginally.

The number of SIP accounts, however, registered a small gain in May as overall assets under management of the MF industry rose to ₹24.55 lakh crore in May from the ₹23.94 lakh crore in April, data from Association of Mutual Funds in India (AMFI) showed.

As per the latest data, equity schemes witnessed net inflows of ₹5,256.52 core in May, lower than the previous month’s ₹6,212.96 crore. Further, the flows through SIPs continued to decline at ₹8,123.03 crore in May from April’s ₹8,376.11 crore. In May, the benchmark 30-share Sensex had lost almost 1,300 points, or 3.84%, in sharp contrast to April when the index rose more than 14%, or 4,249 points.

The SIP flow in March was pegged at ₹8,641.20 crore. The number of SIP folios, however, rose marginally to 3.16 crore in May from the 3.14 crore in April.

Flows into debt funds saw an increase at ₹63,665 crore compared with the previous month’s ₹43,431 crore.

“On the debt side, investors taking advantage of the conducive reducing interest rates trend and shifting towards high quality AAA-rated paper has resulted in a steady rise in net flows,” said N. S. Venkatesh, CEO, AMFI, adding credit risk concerns had ebbed as redemptions reduced following regulatory support.

Credit risk funds, which have been in the news for the quality of paper they hold, saw net outflows of ₹5,173 crore in May, much lower than the previous month’s ₹19,239 crore.

Among exchange traded funds (ETFs), gold funds also registered a rise in net inflows at ₹815 crore (₹731 crore in April) as many market participants were seen recommending the yellow metal as a hedge against volatility among most other asset classes such as equities and commodities, among others.

Flows in index ETFs, on the other hand, witnessed a fall fell in flows to ₹562.58 crore in May from the April’s ₹635 crore.

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Printable version | Jul 2, 2020 10:18:01 PM |

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