Equity flows drop 78% in November 2019

By Ravi Samalad |  09-12-19 | 
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About the Author
Ravi Samalad is Assistant Manager - Editoral for Morningstar.in.

Equity flows dropped by 78% from Rs 6,026 crore in October 2019 to Rs 1,312 crore in November 2019 on account of profit booking by investors as markets reached a new peak.  Gross redemptions increased from Rs 11,047 crore in October to reach Rs  16,268 crore in November. Sector, value,  dividend yield and large and mid-cap funds saw outflows in the equity category in November.

Nevertheless, systematic investment plan (SIP) inflows continued to be robust. SIP inflows touched an all-time high of Rs 8,272 crore in November 2019, up Rs 27 crore, from Rs 8,245 crore in October 2019.

"Goal-based, long term SIP investments from retail investors continue to grow steadily, with SIP AUM at an all-time high at Rs 3.12 lakh crores. While, equity net inflows have come down sharply in November, partly due to investors booking profits, the overall Mutual Fund Industry AUM reached an all-time high of Rs 27 Lakh crores,” said N S Venkatesh, CEO, AMFI.

Investors continued to exit credit risk funds due to the ongoing stress in debt funds. In November, credit risk funds saw net outflows of Rs -1,899 crore. From April till November, the category has seen cumulative net outflows of Rs -19,416 crore.

As liquid funds have now started charging a graded exit load, the inflows in these funds moderated to Rs 6,938 crore in November. This money seems to be moving into overnight category where inflows increased by 259% from Rs 5,748 crore in October 2019 to Rs 20,649 crore in November.

All in all, net inflows in debt category stood at Rs 51,428 crore, which was 58% less in comparison to inflows of Rs 1.21 lakh crore in October 2019. This was largely due to lesser inflows in liquid funds.

In the hybrid category, arbitrage funds saw healthy inflows of Rs 5,353 crore in November. Arbitrage funds are gaining traction due to their ability to offer better post-tax returns in comparison to liquid funds for investors in the highest tax bracket. The category has received YTD inflows of Rs 33,517 crore.

Exchange traded funds which track the equity indices received Rs 2,954 crore in November while YTD inflows reached Rs 24,085 crore.

The average assets under management of the industry increased from Rs 26.13 lakh crore in October 2019 to reach Rs 26.94 lakh crore in November 2019.

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