Equity and debt mutual funds witness massive outflows in January

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Equity and debt mutual funds registered heavy outflows in the month of January. While equity funds saw a drop in outflow numbers, there was a drastic outflow from debt mutual funds this time. Equity mutual funds saw net outflows worth Rs 9,253 crore, debt mutual funds saw investors pulling out Rs 33,408 crore in January. Hybrid fund categories finally saw inflows in January.

The highest outflow of Rs 5,933 crore was seen from flexi cap funds. This might be attributed to the recent change in mandate and many schemes re-categorised in the space. This was followed by an outflow worth Rs 2,853.43 crore from large cap funds. Here’s a look at the data for January:

Scheme Name Net inflow (+)/outflow(-)
Multi Cap Fund 2,857.90
Large Cap Fund -2,853.43
Large & Mid Cap Fund -187.43
Mid Cap Fund -1,206.33
Small Cap Fund -1,572.36
Dividend Yield Fund 0.22
Value Fund/Contra Fund -1,639.63
Focused Fund -484.64
Sectoral/Thematic Funds 2,586.24
ELSS -820.09
Flexi Cap Fund -5,933.67

In the debt mutual fund space, massive outflows were seen from liquid funds, low duration funds and money market funds. Liquid funds saw an outflow of Rs 45,315.69 crore in January. Corporate Bond Funds and Short Duration Funds saw good inflows in January following advice from fund managers and mutual fund advisors.

Scheme Name Net inflow (+)/outflow(-)
Overnight Fund 670.12
Liquid Fund -45,315.69
Ultra Short Duration Fund 551.61
Low Duration Fund -8,040.77
Money Market Fund -1,043.37
Short Duration Fund 6,892.63
Medium Duration Fund 1,841.75
Medium to Long Duration Fund -402.54
Long Duration Fund -22.16
Dynamic Bond Fund 785.15
Corporate Bond Fund 5,428.51
Credit Risk Fund 366.44
Banking and PSU Fund 1,740.12
Gilt Fund -40.62
Gilt Fund with 10 year constant duration 51.60
Floater Fund 3,128.48

Similarly, aggressive hybrid funds continued to see massive outflows in January. On the other hand following big push from the industry, balance advantage funds saw inflows worth Rs 658 crore. Arbitrage funds also saw big inflows in January. Index funds, ETFs including gold ETFs saw inflows in January.

Scheme Name Net inflow (+)/outflow(-)
Conservative Hybrid Fund 71.37
Aggressive Hybrid Fund -3,377.40
Balanced Advantage Fund 658.37
Multi Asset Allocation Fund -228.84
Arbitrage Fund 5,234.86
Equity Savings Fund -216.63

“The continuation of net outflows from equity funds could be attributed to profit booking/portfolio rebalancing as markets continue to touch new highs. In fact, the net outflow number would have been higher had it not been for the NFO in the Sectoral or thematic fund category which collected INR 4,185 crore. That said, while the gross purchase (new investments) was lower in January than the previous month; gross redemptions also came down at INR 33,383.65 crore from INR 36,220.28 crore in December. This suggests that while investors are yet to come back and invest substantially in the funds, there are signs of moderation with respect to redemption as well. Since July, equity oriented mutual funds have witnessed a net outflow of INR 42,257.02 crores; but the net outflow figure in the last two months have displayed decreasing trend,” says Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.