Inflows into mutual funds dip in August; NFOs emerge winners

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Investors pumped in a net Rs 8,666.68 crore in equity mutual fund schemes in August, compared to Rs 22,583.52 crore invested in July. Equity mutual funds witnessed a total outflow of Rs 25,002.08 crore in August.

Continuing with the winning streak, flexi cap funds saw the biggest inflows in August as well. The category saw inflows worth Rs 4,741.22 crore followed by focused funds. On the other, ELSS and value funds saw outflows. The NFOs continued to attract big money from retail investors. NFOs across categories mobilised Rs 23,668 crore in August.

Debt mutual fund schemes also saw net inflows worth Rs 1,074.44 in August. This number was much higher at Rs 73,694.04 crore in July. Similar to last month’s trends, floater funds attracted the biggest investment. However, overnight and low duration funds saw big withdrawals.

Among hybrid funds, the balanced advantage category is still continuing to attract big inflows. The category saw a net inflow worth Rs 16,570.97 crore in August. Multi asset funds and balanced hybrid funds continued to see outflows last month as well.

ETFs were also gainers in the month of August. ETFs except those investing in gold saw inflows worth Rs 8,548.13 crore in August.

“Last month saw the highest ever flows into equity funds as lower interest rates on traditional investments and a rising equity market seems to have encouraged a lot of investors to turn towards mutual funds. Despite the concerns around the third wave of Coronavirus, the markets have been on an uptrend as a vast majority of the sectors remained in the green. Although this trend continued into the month of August, the magnitude of flows has been lower in comparison. Record flows into NFO’s combined with a stable SIP book have largely contributed to the flows,” said Kavitha Krishnan, Senior Analyst Manager Research, Morningstar India.

“Overall positive flows in the open-ended MF schemes and market indices touching all-time high, helped the Indian MF Industry Net AUMs to breach record INR 36 lakh crore milestone in August 2021.
Retail AUM at INR 17.15 lakh crores, almost half of Total Industry AUMs, SIP AUMs at record high INR 5.26 lakh crores, which now forms a third of Retail AUM, healthy rise in SIP Accounts at record 4.32 crores and monthly SIP contribution at an all-time high at INR 9,923.15 crores is reflective of established and rising retail preference towards mutual funds as a long-term wealth creation avenue,” said N S Venkatesh, Chief Executive, AMFI.