New Delhi: Equity mutual funds witnessed a net inflow of around Rs 6,489 crore in September, the lowest in the last four months, due to profit-booking by investors after a rally in markets following a reduction in corporate tax.
According to data by the Association of Mutual Funds in India (Amfi), open-ended equity schemes witnessed an infusion of Rs 6,609 crore, while there was an outflow of Rs 120 crore from close ended equity plans, translating into a net equity inflow of Rs 6,489 crore in September.
In comparison, net inflows in equity and equity-linked saving schemes stood at Rs 9,090 crore in August. Such inflows stood at Rs 8,092 crore in July, Rs 7,585 crore in June and Rs 4,968 crore in May.
"Investors continue to invest into equity funds through SIPs while lumpsum flows remain a mixed bag. There was some profit-booking by investors after the market rally post the corporate tax reduction announcement," said Kaustubh Belapurkar, Director - Manager Research at Morningstar Investment Adviser India.
"Investors will look for cues for a broad-based economic recovery before making larger allocation towards equities," he added.
Amfi CEO N S Venkatesh said, "Going forward, if the equity markets start showing growth we should see positive upward trend in mutual funds too". Despite the decline in inflows, the asset base of equity mutual funds increased to Rs 7.57 lakh crore in September from Rs 7.16 lakh crore in the preceding month.
Overall, mutual fund schemes witnessed a redemption of Rs 1.52 lakh crore last month as compared to an inflow of Rs 1.02 lakh crore in August. The massive redemptions could be attributed to debt-oriented schemes, which saw an outflow of Rs 1.58 lakh crore.
Among debt-oriented schemes, liquid funds — with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon — saw an outflow of Rs 1.41 lakh crore.
"Liquid funds have seen redemptions which is a phenomenon we have seen at the quarter end, for the advance tax purposes and the same is reflected in this month, September being a quarter-end," Venkatesh said.
Besides, gold exchange-traded funds witnessed an infusion of Rs 44 crore against an inflow of Rs 145 crore in August. The total outflow has pulled down the asset base of the MF industry, comprising 44 players, by 4 per cent to Rs 24.51 lakh crore in September-end from Rs 25.47 lakh crore at end-August.
Inflows through Systematic Investment Plans (SIPs) rose to Rs 8,263 crore during the month under review from Rs 8,231 crore in August.
"We have seen positive growth in the mutual fund market from the retail investors. The regulator has done a phenomenal job in mitigating the risks in the debt market investments. For equity funds, we see the growth is mirroring the markets. The new SIP account opening are showing a robust growth. SIP is here to stay and when broader markets show performance we see SIP outperforming," Venkatesh added.
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