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.
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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.
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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.