The slowdown of fund flow into equity schemes continued with investment slipping 12 per cent last month to ₹7,626 crore against ₹8,637 crore logged in June as investors booked profit on the back of renewed rally in the market.
Despite most mutual funds (MFs) restricting flows into small-cap schemes, investors pumped in ₹4,171 crore (₹5,472 crore) last month even as large-cap and focused funds registered a net outflow of ₹1,880 crore (-₹2,049 crore) and ₹1,067 crore (-₹1,018 crore), according to the Association of Mutual Funds in India (AMFI) data released on Wednesday.
Himanshu Srivastava, Associate Director (Manager Research), Morningstar India, said the 29th month of consecutive net inflows into equity schemes were driven by five new fund offers, which cumulatively collected ₹3,011 crore.
While investors are booking profit from large-cap funds carried away by short-term trends, they should know mid- and small-cap funds are relatively risky, he said.
SIP inflows
Inflows through systematic investment plan (SIP) hit a new high last month at ₹15,245 crore against ₹14,734 crore in June, as the number of new SIPs registered was the highest-ever at 33.06 lakh. The SIP asset under management (AUM) was also at an all-time high at ₹8.32-lakh crore (₹7.94-lakh crore).
NS Venkatesh, CEO, AMFI, said the surge in retail investors’ interest in MFs has translated into an impressive growth in SIP as MFs tapped into Bharat’s wealth and aspiration to partake in market growth.
Investors are pouring into small-cap funds as they want to reap the benefit of bounce-back in these stocks after a sharp fall. MFs, which have already restricted inflows into small-cap funds, will take a call on further curbs if the deployment in small-cap funds becomes difficult, he added.
Manish Mehta, National Head - Sales, Kotak Mahindra AMC, said with equity markets hitting all-time high, investors booked profit and for fresh investments they should consider asset-allocation products besides continuing with SIPs.
Inflows into debt funds hit ₹61,440 crore (-₹14,136 crore), largely due to ₹51,938-crore investments in liquid funds. Overall, the AUM of MFs hit a new high of ₹46.37-lakh crore (₹44.39-lakh crore).