MFs see rise in redemption pressure amid spike in inflows across categories

The comparatively high growth in outflows has weighed on the net inflows in equity and hybrid schemes between June and August

Investors raised investments across fund categories in the first half of the 2022-23 financial year (H1FY23) but increase in gross outflows, or redemptions have weighed on the net inflows tally.
 

Sample this: while investments in equity schemes in September was 9 per cent more than that of April, but redemptions were 29 per cent higher.

Similarly, in the case of passive schemes, inflows rose just 16 per cent but gross outflows were more than double than that of the April number. 
 

In simple terms, while fresh money is flowing into many mutual fund (MF) scheme categories, the pace of redemption by existing investors is more than before.
 

The comparatively higher growth in outflows has weighed on the net inflows in equity and hybrid schemes for three-straight months of June, July and August. 
 

In fact, hybrid schemes have witnessed negative inflows for the last four months (September too) as investors took out large amounts from arbitrage funds.

 

Source: Amfi. Note: Inflows and outflows are on a gross basis (in Rs  cr)