This was the 31st consecutive month of net inflows for equity-oriented funds.
While equity funds witnessed inflows, it was lower than the inflows worth Rs 20,245 crore seen in August.
Here are the other highlights of the mutual fund industry data for September issued by AMFI:
– Smallcap funds, the category that has seen consistently strong inflows in the past few months, saw a slowdown in September. The category saw net inflows of Rs 2,678 crore in September, compared to Rs 4,265 crore in August.
– Sectoral/thematic funds saw the highest inflows among all categories, at Rs 3,147 crore in September, but this was lower than the inflows of Rs 4,806 crore in August.
– Largecap funds saw outflows of Rs 111 crore in September, compared to outflows of Rs 349 crore in August.-The MF industry assets under management (AUM) as of September 30 was Rs 46.58 lakh crore, compared to Rs 46.63 lakh crore a month ago.
-Inflows through the systematic investment route remained robust at Rs 16,420 crore in September. This was higher than Rs 15,814 worth of inflows seen in August.
– SIP AUM as of September 30 was at Rs 8.70 lakh crore, compared to Rs 8.47 lakh crore a month ago.
Expert View
Murthy Nagarajan, Head- Fixed Income, Tata Asset Management
Outflows normally happen from mutual funds during half-year closing, as banks have to set aside capital against their investments. Most banks have been investing in liquid and money market funds as the yield to maturity of liquid and money markets are 25 to 50 basis points higher than lending in overnight markets. Corporates withdraw due to salary and other half-yearly payouts.
Melvyn Santarita, Analyst – Manager Research, Morningstar Investment Adviser
The quantum of net flows in both the smallcap and the midcap as a category saw a dip compared to the previous months. The dip in the net flows of these categories could be attributed to some bit of profit booking by investors, coupled with concerns regarding inflated valuations in some of these segments.
Investors should note that while both the midcap and the smallcap categories have the potential to deliver good returns, these categories inherently are volatile with sharp drawdown risks. Therefore, investors should have a long-term time horizon, while investing in these categories.
Ashwini Kumar, Head – Market Data, ICRA Analytics
The assets under management (AUM) of the Indian mutual fund industry witnessed good growth during the first half of the current fiscal, fuelled by strong gains in stock prices on the back of positive sentiments around the country’s macroeconomic fundamentals.
Equity-oriented schemes continued to witness a strong uptick in demand, backed by a sense of optimism around India’s economic growth prospects. FII inflows, too, have led to a rise, including comparative economic factors around the globe.
The Reserve Bank of India (RBI) has adopted a rate-pause stance at the recently concluded Monetary Policy Committee meeting, including the evolving geo-political developments that will likely keep the investors cautious in the near term.
Long-term investors may show interest in entering the market at this elevated level.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)