Sees record inflow for a month since entry load ban took effect.
The domestic mutual fund sector has seen a record high inflow in its equity segment in February since the entry load ban of 2009. This is the third month in a row that net inflow in equity schemes has been positive.
That is an exception from the year’s trend. In the previous financial year, the total net inflow in equity schemes was merely Rs 595 crore. This year, it is worse, with a net outflow. Till February, equity schemes saw a net outflow of Rs 13,281 crore.
TURNING THE CORNER
Net inflow/outflow in February |
| Category |
Net inflow/
outflow*
|
Category |
Net inflow/
outflow* |
| Income |
13,708 |
ELSS |
348 |
| Equity |
2,495 |
Gold ETFs |
25 |
| Balanced |
216 |
Other ETFs |
480 |
Liquid/Money
market |
8,770 |
Fund of funds
investing overseas |
14* |
| GILT |
271* |
Total |
25,757 |
All figures in Rs crore
Source : Association of Mutual Funds in India |
Data from the Association of Mutual Funds in India (Amfi) showed a fresh flow of Rs 2,495 crore in February. Taking into account the flow in equity-linked saving schemes (ELSS), overall inflow in equity-related schemes surpassed Rs 2,800 crore.
MF equity schemes were badly hit since the capital markets regulator banned entry load. In the past 19 months, industry saw net outflow during 13 months from these schemes.
Gopal Agrawal, head of equity at Mirae Asset Mutual Fund, said: "Investors were sitting on a good amount of cash. And, as the markets during the month saw over 15 per cent correction compared with the last peak, investors used this opportunity to enter equity schemes."
He added that if there were more of such corrections in capital markets, there could be a similar flow into equity schemes. Industry experts said as the financial year was closing, it had also helped in sales of ELSS, which in February was nearly Rs 350 crore.
During the month, the benchmark index of the Bombay Stock Exchange, the Sensex, had tumbled to 17,463.04. The CNX Nifty closed at a low of 5,225.8 in one of the trading sessions.
According to equity heads in the fund market, the February inflow is significant, given the situation since the entry load ban. "However, it is still not as substantially high as before August 2009," said the chief investment officer at a mid-sized fund house. He said uncertainty at home and abroad had made equity markets jittery. "Unless some stablisation is reached, it's tough to keep adding assets in the equity categories," he added.
During February, income funds saw the largest inflow, at Rs 13,708 crore, followed by liquid and money market schemes at Rs 8,770 crore. The industry’s overall net inflow in February was Rs 25,757 crore.
