Equity MFs see net inflows after six months

But too early to say whether equity schemes are seeing a reverse trend.

Last year ended on a positive note in terms of investment in the domestic equity mutual funds; thanks to a rise in the equity markets during the month of December.

Whether it was equity schemes alone or the equity-linked saving schemes (ELSS), both saw net inflows. In fact, it is after six months of a continuous net outflow from the equity assets that this segment could bring some cheer to fund managers.

According to the latest statistics from the industry body Association of Mutual Funds in India, equity schemes witnessed a net inflow of Rs 877 crore, while ELSS saw Rs 90 crore of fresh assets.

The Chief Investment Officer of a large-sized fund house said, “It’s encouraging to see an inflow in the equity segment. But still redemption is at a higher side.”

In December, there were three new fund offers for equity, which garnered Rs 290 crore.

Fund managers said it would be too early to say whether equity schemes were seeing a reverse trend. “There is a combination of factors which resulted in a reasonable inflow of funds in the equity segment,” said the equity head of a medium-sized fund house, which is mostly in the equity side of the business.

“The benchmark market indices were up around 5 per cent. Most of the assets are from retail investors, which tend to get into markets when indices are on the rise. As the year has entered the last quarter, from a tax benefits perspective investors put in money in ELSS,” he added.

In the case of ELSS, it was the first time that this segment could see a net inflow in the current financial year.

The total net outflow from the equity segment between April and December stood at Rs 16,657 crore, while during the corresponding period last year there was a net inflow of Rs 117 crore. In December, income funds saw the highest redemption at Rs 32,698 crore while liquid and money market funds witnessed an outflow of Rs 12,500 crore. Other categories from which funds flowed out were GILT funds and other Exchange Traded Funds (ETFs).