Inflows into equity MFs jump 12 pc to Rs 9,000-cr in August

Investors pumped in over Rs 9,000 crore into equity mutual funds in August, a sharp rise of 12 per cent from the preceding month, despite volatile stock markets.

Open-ended equity schemes witnessed an infusion of Rs 9,152 crore, while there was a small outflow of Rs 62 crore from close-ended equity plans, taking total equity inflows to Rs 9,090 crore last month, according to data from the Association of Mutual Funds in India (AMFI).

In comparison, net inflows in equity plans stood at Rs 8,092 crore in July this year and Rs 8,375 crore in August 2018.

The latest inflow has helped in raising the asset base of equity mutual funds (MFs) to Rs 7,16,034 crore at the end of August from Rs 7,15,939 crore in the preceding month.

The 44-player mutual fund industry, which mainly depends on systematic investment plans or SIPs for inflows in equity funds, has seen a marginal drop in SIP investment.

Investors pumped in Rs 8,231 crore through SIPs in August, marginally lower than Rs 8,324 crore collected in the preceding month.

SIP is an investment vehicle that allows investors to invest in small amount periodically instead of lumpsum. The frequency of investment is usually weekly, monthly or quarterly. It is similar to a recurring deposit where investors deposit a small or fixed amount every month.

"Retail investor interest in equity mutual funds, for the fourth time in succession, continues to be steady, displaying maturity, despite uncertain economic and volatile market situation.

"Net inflows, largely in all categories of equity funds, especially in small and mid-cap funds, as also in the ELSS (equity-linked saving scheme) segment, signify heightened confidence and interest in emerging businesses and disciplined tax planning," AMFI Chief Executive Officer N S Venkatesh said.

Going ahead, Venkatesh said that SIPs would witness robust flows on equity side in September while on the debt side, liquid funds may see volatility owing to quarter-end phenomenon.

Inflows suggest that equity fund investors were undeterred by the market volatility, and also indicate investors' understanding of the market risks associated in the mutual fund schemes. Such risks arises from macroeconomic factors.

The 30-share Sensex was down 148 points last month.

Apart from inflows in equities, liquid funds -- with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon -- witnessed an infusion of Rs 79,428 crore last month as compared to Rs 45,441 crore in July.

Besides, gold exchange-traded funds saw a total inflow of Rs 145 crore against an outflow of Rs 17.66 crore.

Overall, mutual fund houses witnessed an overall inflow of Rs 1.02 lakh crore last month, much higher than Rs 87,000 crore seen in July. This also pushed the mutual funds' asset base to Rs 25.47 lakh crore in August-end from Rs 24.53 lakh crore in July-end.