Equity Mutual Fund Inflows Drop 9% in September
In September, equity mutual fund inflows in India saw a significant dip of 9%, totaling Rs 30,421.69 crore, compared to Rs 33,403.37 crore in August. This decline can be attributed to a cautious approach taken by retail investors amidst ongoing market fluctuations. Despite the drop in inflows, the total assets under management (AUM) of the mutual fund industry slightly increased to Rs 75.61 lakh crore from Rs 75.19 lakh crore.
Interestingly, inflows through systematic investment plans (SIPs) reached a record high of Rs 29,361 crore in September, up from Rs 28,265 crore the previous month, indicating a growing trend among investors to commit to regular investments despite market volatility.
However, the performance of various equity mutual fund schemes varied significantly. Small-cap funds experienced a noticeable decline of 12% in inflows, totaling Rs 4,362.9 crore compared to Rs 4,992.91 crore in August. Similarly, mid-cap funds also saw a dip of 4.6% in inflows, amounting to Rs 5,085.40 crore, and large-cap funds faced an 18% drop, bringing inflows down to Rs 2,319.04 crore from Rs 2,834.88 crore.
In addition to equity funds, sectoral and thematic funds reported a staggering 67% decline in net inflows, dropping to Rs 1,220.89 crore in September from Rs 3,893.16 crore in the previous month. This shift reflects the changing preferences and risk appetite of investors in the current market scenario.
On the debt mutual fund front, the situation was more challenging, with net outflows reaching Rs 1,01,977.26 crore, compared to an outflow of Rs 7,979.84 crore in August. Anand Vardarajan, chief business officer at Tata Asset Management, noted that these negative flows were primarily due to quarter-end liquidity requirements and festive season spending, which impacted investor behavior.
Liquid mutual funds experienced the highest outflows at Rs 66,042.32 crore, while money market funds saw outflows of Rs 17,899.9 crore. Hybrid mutual funds also faced a decline of 38% in inflows, dropping to Rs 9,397.22 crore from Rs 15,293.7 crore.
Overall, the SIP AUM stood at Rs 15,52,303 crore, accounting for 20.2% of the mutual fund industry’s total assets. This indicates that while overall inflows may be declining, many investors still believe in the long-term potential of mutual funds through regular investments.
