Monthly equity mutual fund inflow shrinks 10%, SIPs at fresh high of Rs 24,509 crore

Equity mutual funds attracted Rs 34,419 crore in September, marking a decline of 10 per cent from the preceding month, on a sharp slump in inflow in thematic and large-cap funds.

This was also the lowest level of inflow since April when equity schemes saw investments of Rs 18,917 crore.

Despite the drop in net inflows, this was still the 43rd consecutive month of net inflow in the equity-oriented funds highlighting the ever-increasing appeal of mutual funds among investors, data with the Association of Mutual Funds in India (AMFI) showed on Thursday.

Moreover, monthly contributions from the Systematic Investment Plan (SIP) rose to an all-time high of Rs 24,509 crore in September, as against Rs 23,547 in August.

This highlights the shifting investor sentiment towards disciplined and long-term wealth accumulation, Venkat Chalasani, Chief Executive, AMFI, said.

Overall, the mutual fund industry witnessed an outflow of Rs 71,114 crore in the month under review, after an investment of Rs 1.08 lakh crore in August, largely due to withdrawal to the tune of Rs 1.14 lakh crore from debt schemes.

Undeterred by the outflow, the industry's net assets under management rose to Rs 67 lakh crore last month from Rs 66.7 lakh crore in August.

"The mutual fund industry is proud to reach a milestone of 5.01 crore unique investors. This, along with the folio count surpassing 21 crore, underscores the efforts taken by the AMCs (asset management companies) and distributors to spread financial awareness. The 'Mutual Funds Sahi Hai campaign' has helped build investor confidence which is indicated by the growing appreciation for mutual funds as a preferred investment avenue," Chalasani said.

Hitesh Thakkar, Acting CEO, ITI Mutual Fund, said investors are now able to understand that short-term volatility in the market is part of a long-term wealth creation journey. That is the reason shares of financial assets have been increasing rapidly & within financial assets, MF shares are increasing gradually.

As per the data, equity-oriented schemes witnessed an inflow of Rs 34,419 crore in September, way lower than Rs 38,239 crore attracted in August and Rs 37,113 crore in July.

Further, equity schemes saw inflows of Rs 40,608 crore and Rs 34,697 crore in June and May, respectively.

There were a plethora of new scheme launches in September, a trend which has been consistent of late. Cumulatively, these 27 new schemes managed to garner Rs 14,575 crore during the new fund offering (NFO) period, Melvyn Santarita, Analyst – Manager Research, Morningstar Investment Research India, said.

The highest number of schemes were launched in the Index fund category -13 which cumulatively mobilised Rs 3,656 crore followed by the sectoral/thematic segment which saw the launch of 4 new schemes collecting Rs 7,842 crore during the month, he added.

Within the equity schemes, sector or thematic funds attracted investors with the highest net inflows of Rs 13,255 crore during the month under review. However, the flow in the segment was less compared to Rs 18,117 crore in August.

Additionally, large-cap funds saw a drop in inflows to Rs 1,769 crore from Rs 2,637 crore.

After seeing two months of consecutive inflows, debt-oriented mutual funds experienced large outflows in September losing Rs 1.14 lakh crore, compared to inflow of Rs 45,169 crore in August.

"The outflows in September were driven by increased corporate redemptions to meet second-quarter advance tax obligations," Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India, said.

Liquid funds experienced a sharp turnaround, with outflows of Rs 72,666 crore last month, representing 64 per cent of the overall outflow. This was followed by the money market funds that saw outflows of Rs 23,421 crore and overnight funds that witnessed a net outflow of Rs 19,363 crore.