Association of Mutual Funds India reports a 95% fall in net inflows. Mutual funds registered an outflow of Rs 44,226 crore in June according to the data released by the Association of Mutual Funds in India (AMFI). Net inflow into equity mutual funds slumped 95 percent to a little over Rs 240 crore in June as investors pulled out from largecap and multicap funds due to profit-booking.
Association of Mutual funds India had Rs 25.48 Lakh Crores in assets. Under management (AUM) at the end of the month from Rs. 24.54 lakh crore, a growth of 4% compared to May, the data released on July 8 says. Systematic Investment Plans (SIP) inflows in June fell to Rs 7,927.11 crore from Rs 8,123.03 crore in the previous month, a drop of 2.4 per cent.
Mutual Funds To The Inflows
“If we look at the data closely, we would realise that there was no drop in gross inflows. The low net inflows have been because of heavy redemptions, which have taken place last month. The primary reason was that a lot of clients saw sharp recoveries in the portfolio values compared to March 20 values. In these uncertain times there was a rush to redeem for multiple reasons, ranging from creating liquidity, cutting losses to booking profits,” said Jharna Agarwal, Head, Anand Rathi Preferred.
Ritu Poddar, Head, Mutual Fund Research and Product, Nirmal Bang,
“Overall fund mobilisation has increased by 6 percent to Rs 13,760 Crores in June 2020 . Which is from Rs 12,950 Crores in May 2020. Whereas redemption has gone up by 71 percent to Rs 13,535 Crores in June. Against Rs 7,904 crore in May 2020. This resulted in the net inflow number looking so low,”. Despite a slowdown in inflows, the industry has added 1.35 lakh new folios in the equity category, Poddar added.
Experts believe this stagnation a short-term phenomenon with investment in equity funds to recover post-COVID. The middle class is becoming financially aware with increased awareness about mutual funds and the balance of risk-return they bundle.
Sensex gained 7.68 per cent in June. As on July 10, it closed at Rs 36,594.33 level.
June AMFI Data | Equity inflows decline 95%, month-on-month.
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