Equity: Equity mutual fund flows drop 30% in September

Mumbai: Flows into equity mutual funds in September fell 30% from the previous month on account of a drop in appetite for mid-cap and small-cap funds and outflows from large-cap schemes. Investments into funds through Systematic Investment Plans (SIPs), however, continued at a record pace as investors saw more merit in putting money into schemes in a staggered manner amid concerns that the current levels may not sustain.

Equity mutual funds garnered ₹14,091 crore in September as against ₹20,245 crore in August, according to data from Association of Mutual Funds of India (AMFI).

Flows through systematic investment plans (SIPs) were at ₹16420 crore – the highest in a month, as against ₹15,830 crore in August. Debt funds saw outflow of ₹1,01,512 crore, due to redemptions from liquid funds by companies ahead of the September quarter end. Overall, average asset under management rose to ₹47.50 lakh crore from ₹46.62 lakh crore in August thanks to the marked-to-market gains in equities.

Within equity schemes, multi-cap, thematic and flexi-cap scheme categories got the highest flows, while investments in mid-cap and small-cap funds slowed.

“There is a marginal shift amongst equity investors to multi-cap and flexi-cap funds, which is a healthy sign,” said Anthony Heredia, CEO, Mahindra Manulife Mutual Fund.Thematic funds saw inflows of ₹3,147 crore, the highest amongst all equity categories.

“Flows can be attributed to the fact that there were four new fund launches in this category which cumulatively garnered ₹1,629 crore,” said Melvyn Santarita, analyst – manager research, Morningstar Investment Adviser.Small-cap funds saw flows to the tune of Rs 2678 crore in September compared to Rs 4,265 crore in August.

“The monthly net inflow into small-cap funds slowed to Rs.2,678 crore, marking the first slowdown after 4 months of heavy inflows, averaging at Rs.4,298 crore for the May-Aug period,” said Gopal Kavalireddi, Vice President – Research of brokerage Fyers.

Midcap funds saw flows of Rs 2001 crore as against Rs 2512 crore in August.

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