Equity funds limit outflows in Nov; tax funds get inflows

The domestic mutual fund industry managed to limit net outflows from equity funds during November.

Diversified equity, equity-linked savings, and equity exchange-traded fund categories collectively registered net outflows of Rs 168 crore, down from Rs 814 crore seen in October, as per data collected from Association of Mutual Funds in India (Amfi) web site.

New diversified equity plans received lukewarm response due to the weakening trend in Indian equity indices.

Only tax-saving plans continued to attract flows, though the pace of inflows fell marginally during November.

Diversified equity plans
Persistent adverse news and mounting uncertainty from global markets continued to cast a shadow over Indian equities.

In November, the Bombay Stock Exchange’s 30-share Sensex and National Stock Exchange’s 50-share Nifty shed 7.10 per cent and 4.52 per cent, respectively. Diversified equity plans managed to curtail net outflows to Rs 134 crore in November against net outflows of Rs 706 crore in October.

At the end of November, assets of the category fell 6 per cent, more or less in line with the fall in indices. The consistent fall in share indices continued to take its toll on new equity funds.

Allotment of Birla Sunlife Commodity Equities Fund-Global Agri Plan, Global Multi Commodity Plan and Global Precious Metals Plan, and Principal Emerging Bluechip Fund was completed during November. These schemes could collectively mop up just Rs 20 crore.

ELSS
Inflows in ELSS remained stable, but assets shed 5.69 per cent due to downfall in stock market. Investments in ELSS along with other designated tax-saving instruments qualify for deduction of up to Rs 1,00,000 from taxable income under Section 80C of Income Tax Act, 1961.

ETFs
Net outflows in equity ETFs slowed down to Rs 170 crore from Rs 248 crore, a month ago. Overall assets of ETFs shed 12.5 per cent during November. Benchmark Mutual Fund, which is a pioneer of ETFs in India, witnessed nearly 18.5 per cent decline in average assets under management.

Fall in average assets was led by significant outflows from PSU Bank exchange-traded fund and Nifty exchange-traded fund.