ALSO READSebi's one-scheme-per-category to shake up mutual funds' industry Sensex can cross 100,000 mark in just 10 years: Morgan Stanley Mutual funds keep fingers crossed on rules for merger of schemes What mutual funds bought and sold in August Equity-oriented MF schemes to offer high double-digit returns to investors
Mutual funds (MFs) garnered investor flows in excess of Rs 20,000 crore for the second straight month in September, taking the year-to-date inflow tally beyond Rs 1 lakh crore.
Last month, the equity schemes saw net inflows of Rs 22,233 crore, including Rs 2,404 crore pocketed by tax-saving MF schemes, according to data released by the Association of Mutual Funds in India on Friday.
In August, equity MFs had seen net inflows of Rs 20,362 crore. Two straight months of sharp inflows belie talks that the high tally for August was a one-off event. Despite a relatively slow start, the monthly inflow tally now stands at Rs 11,500 crore for 2017.
Ridham Desai, managing director at Morgan Stanley India, had said the MF inflow “party has just begun”. There is room for more inflows, as India’s financial saving as a percentage of GDP (gross domestic product) is just nine per cent against 15 per cent eight years ago, he said.
The sharp inflows in September were despite the benchmark Nifty coming off as much as four per cent from its high before recouping some of the losses.
“As and when markets correct, we will see an increase in domestic inflows in equities. If markets continue to rise, we will see more allocation towards balanced funds or fixed income funds,” said Anand Shah, deputy CEO and head (investments), BNP Paribas Asset Management.
Desai said it had been in several occasions in the past that retail investors continued to put in money into equity MFs, shrugging off bout market weakness.
Most of the inflows into equity MFs come from individual investors, according to industry players. Most retail clients are putting in money into equity schemes through the so-called systematic investment plans (SIPs), which involves investing a fixed sum every month.
Total assets under management (AUM) for September stood at Rs 20.4 lakh crore compared with Rs 20.6 lakh crore at the end of August.
Industry players said the fall in AUM could be due to a decline in asset prices following a correction in the market. While AUM of the equity segment remained constant at Rs 6.6 lakh crore, assets of certain debt schemes and equity ETFs (exchange traded funds) witnessed a decline.
The high inflows into equity MFs have provided a counterbalance to the huge FII selling. Since August, overseas investors have pulled out close to Rs 20,000 crore from the domestic market.
Domestic MFs have provided counter-buying worth over Rs 30,000 crore during the same period. The markets, however, have more or less remained unchanged.