Equity fund inflows moderate from December highs, SIP investors remain confident

The decline in equity inflows can also be attributed to the lack of fresh fund offers (NFOs) during January. Mutual fund houses had launched six growth or equity-oriented schemes, 12,446 crore in December as against zero new schemes last month.

Despite volatility, retail investors maintained confidence as systematic investment scheme (SIP) contributions hit an all-time high, data released by the Association of Mutual Funds in India (Amfi) showed on Wednesday. Is. 11,516.62 crore at the end of last month 11,305.34 crore in December. Moreover, the total number of SIP accounts crossed the 50 million mark for the first time in January.

According to the industry body, the total SIP book was Against 5.76 lakh crore at the end of January 5.65 lakh crore in December.

With the latest data, equity inflows have remained positive for the past 11 months since February 2021, with some moderating in January.

“Worries of ‘new’ variants across the world, relatively high valuations and rising inflation are putting some pressure on the economy. Factors, among others, have been driving the flow over the past month,” said Kavita Krishnan, senior analyst-manager research at Morningstar India. The quantity has decreased.

The Indian equity markets have seen a correction in the recent times keeping pace with the global markets. Stock markets tumbled on the prospect of a US Federal Reserve raising interest rates, a slowdown in China and rising concerns between Ukraine and Russia.

Even though the BSE Sensex fell marginally by half a percentage point during January, the index witnessed wild fluctuations during the month, registering a fall of over 4,000 points.

According to the Nodal Association of Mutual Funds in India, the Total Assets Under Management (AUM) has exceeded 25% on a yearly basis 38.01 lakh crore at the end of January. The monthly net addition to the total AUM was 28,514 crore during the month.

NS Venkatesh, Chief Executive Officer, Amfi said: “Retail mutual fund investors’ confidence in India’s growth story, as reflected through continued high volumes of monthly SIP inflows and with the economy expected to grow at 9.2% Uncertainty arising from external factors such as Fed rate hikes or FII outflows.”

In terms of specific categories, flexi-cap funds saw a jump with net inflows 2,527.16 crore as compared to 2,408.64 crore in December. Besides, large-cap, mid-cap, small-cap and large and mid-cap funds also continued to see good inflows.

In the hybrid category, dynamic asset allocation/balance advantage funds, which were reallocated between debt and equity based on market conditions, saw inflows. 2,762.95 crore.

“While on one hand we are seeing FII outflows, on the other we are seeing positive inflows from domestic investors. This is a very positive change among investors, it is always advisable to buy on downside for better rupee-cost averaging which results in good results in the long run. It is also encouraging to see positive inflows into the dynamic category, as most asset-allocation models maintain a good mix of debt and equity allocation to benefit from market corrections and increased equity allocation,” said Akhil Chaturvedi, Chief Business Officer, Motilal Oswal Asset Management.

On the other hand, open-ended income or debt-oriented schemes saw an influx of 5,087.61 crore in January after seeing net outflow 49,037.52 crore in December.

Further, net outflow of Gold Funds was observed 451.69 crore during January, while passive strategy index funds and exchange traded funds saw inflows 4,914.43 crore and 4,009.03 crores respectively during the month.