BUSINESS

Dip in flows to equity funds continues

Equity mutual fund schemes continued to see a slowdown in inflows for the fourth consecutive month in February as investor sentiment remained jittery due to increased volatility amid global and domestic headwinds.

According to Association of Mutual Funds in India (AMFI) data, equity schemes registered net inflows of Rs. 3,948 crore in February, lower by nearly 20% than the previous month’s flows of Rs. 4,914 crore.

Incidentally, this is also the lowest monthly inflow since March 2018, when equity schemes registered inflows of Rs. 2,954 crore. “It was a challenging month with the markets not behaving well amid high volatility and border tensions,” said N.S. Venkatesh, CEO, AMFI.

Further, if the cumulative flows of equity schemes and the equity-linked savings schemes are taken into consideration, then the combined flows pegged at Rs. 5,122 crore in February was the lowest since January 2017, when Rs. 4,880 crore was registered cumulatively by the two categories.

Meanwhile, the overall mutual fund industry saw net outflows of Rs. 20,083 crore in February, compared to net inflows of Rs. 65,439 crore in January. The February outflows were primarily driven by the liquid schemes followed by income and balanced funds.

Liquid schemes

While liquid schemes saw net outflows of Rs. 24,509 crore, income and balanced funds witnessed outflows of Rs. 4,214 crore and Rs. 1,077 crore, respectively.

The total assets under management (AUM) of the mutual fund industry was pegged at Rs. 23.16 lakh crore, which was a tad lower than the previous month’s AUM of Rs. 23.37 lakh crore. The number of folios registered a marginal rise to 8.91 crore in February from 8.17 crore in January. The AUM from systematic investment plans (SIPs) also increased marginally to Rs. 2.43 lakh crore from Rs. 2.39 lakh crore month-on-month.

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