The uptick in domestic equity markets helped equity funds receive net inflows of Rs 4,499 crore in comparison to inflows of Rs 1,312 crore in November 2019. The BSE Sensex was up 1% in December 2019.
Large cap and focused funds received the highest inflows at Rs 1,135 crore and Rs 1,837 crore, respectively. YTD inflows in equity funds stood at Rs 53,391 crore. “Retail investors continue to repose trust in mutual funds as reflected by continued flows through systematic investment plans (SIPs), despite challenging domestic economic scenario and global trade issues and conflicts. Markets have rallied and indices scaled new peaks, which is reflective of resolution coming through structural policies like IBC and lowering of interest rates, as also, expectation from Budget,” said N S Venkatesh, CEO, AMFI.
Inflows from SIPs stood at Rs 8,518 crore and SIP assets touched an all-time high of Rs 3.17 lakh crore in December 2019.
Inflows in arbitrage funds moderated at Rs 613 crore as compared to Rs 5,354 crore in November 2019. The category has seen traction due to tax efficiency as compared to liquid funds. YTD net inflows in arbitrage funds stood at Rs 34,129 crore. Balanced funds seem to be losing sheen among investors. This category lost Rs -17,594 crore YTD.
Passive funds are slowly attracting investor attention. Exchange traded funds (other than Gold ETFs) received net inflows of Rs 36,758 crore YTD.
Equity funds NFO collections
Total funds mobilised through new fund offers stood at Rs 15,739 crore. Bharat Bond ETF accounted for a major chunk of this inflow, which collected Rs 12,378 crore.
Five new fund offers in equity category collectively mopped up Rs 2,179 crore. Tata Focused Equity Fund mopped up Rs 1,375 crore. Axis Retirement Savings Fund collected Rs 863 crore.
Debt funds see outflow
Liquid funds saw net outflows of Rs -71,158 crore in December 2019. Overnight category also saw net outflow of Rs -8,869 crore. On the other hand, banking and PSU funds and corporate bond funds have received YTD inflows of Rs 34,578 crore and Rs 17,249 crore respectively.
“This is on expected lines as these categories typically witness net outflows during the quarter end months on account of advance tax payment obligation. credit risk and medium-term funds continued to witness net outflows on the back of significant turmoil in the credit markets. On the contrary, investments continued to move to categories which have lower credit risk such as corporate bond and banking & PSU funds. Short duration funds also attracted significant inflows largely on the expectation of slim chances of further rate cuts,” said Himanshu Srivastava, Senior Analyst – Manager Research, Morningstar Investment Advisers India.
Average AUM of the industry reached Rs 27.25 lakh crore in December 2019, from Rs 26.94 lakh crore in November 2019.
