MF Equity Inflows Drop in October: Rs 24,690 Cr

Mumbai, Nov 11 (PTI) Net inflows into mutual funds' equity schemes dropped by nearly 19 per cent to Rs 24,690 crore in October, making it the third consecutive month of a decline in the number, an industry body said on Tuesday.

On the systematic investment plans (SIPs), the preferred vehicle of retail investors, the overall inflows grew to Rs 29,529 crore from September's record high of Rs 29,631 crore.

Amid the rally in gold prices, gold exchange traded funds saw net inflows at Rs 7,743 crore during the month taking the overall assets under management (AUM) in the category to above Rs 1 lakh crore, as per data disclosed by the Association of Mutual Funds of India (Amfi).

The net flows into equity MFs had declined 9 per cent on-month to Rs 30,421 crore in September, after August's 22 per cent decline to Rs 33,430 crore, amid corrections in the equity benchmarks.

Speaking to reporters on Tuesday, Amfi's chief executive V N Chalasani asserted that there is no pattern in the investor interest and attributed the fall to higher redemptions because of the profit-booking amid surge in markets.

The overall redemptions stood at Rs 38,920 crore in October as against Rs 35,982 crore in September. However, the funds mobilised by equity schemes declined in October to Rs 63,611 crore from Rs 66,404 crore in September.

The AUM for the equity schemes, which are looked as the favoured vehicle for long-term value creation and hence tracked closely, stood at Rs 35.16 lakh crore as on October 31 as against Rs 33.68 lakh crore in the month-ago period.

As per previous experience, the beginning of a new quarter saw higher interest in the debt schemes, with net inflows of Rs 1.59 lakh crore in October as against an outflow of Rs 1.01 lakh crore in September, Chalasani said.

The overall MF industry's AUM rose by over 5 per cent to Rs 79.88 lakh crore on the back of the positive activity in the debt segment.

On the gold ETFs front, the net inflows reduced to Rs 7,743 crore in October from Rs 8,363 crore in September, and the AUM stood at Rs 1.02 lakh crore.

Chalasani attributed the continued investor interest in the precious metal to the price increase in the spot prices and also its value as a safe haven asset.

He said the silver ETFs also saw an inflow of over Rs 3,000 crore and the category AUM now stands at over Rs 42,000 crore, he said.

Chalasani said the SIP AUM grew to Rs 16.25 lakh crore and now contributes over a fifth of the overall industry's AUM. The total number of active SIP accounts rose to 9.45 crore from 9.25 crore in the month-ago period, he added.

The total number of SIP accounts stands at 9.73 crore, he said, pointing out that there were additions of 60 lakh accounts and 45 lakh account closures as well during the month,

On the micro SIPs or chhota SIPs front, where the regulator Sebi has voiced concerns on the low traction, Chalasani said there is a technical issue at present where the accounts are not mapped as is expected and the incentives on low entry costs is not available for the first three accounts to an investor.

Amfi is in the process of sorting this out and will be putting in place a system by the end of month on this, and start reporting the micro SIP numbers from January, he said.

Fund houses are also working on a scheme to have ETFs in other commodities, Chalasani said, adding that it will take up to four months to have a scheme out.

October saw the launch of 18 new schemes through which the industry players mobilised Rs 6,062 crore, as against Rs 1,959 crore in nine schemes in the month-ago period.

The Specialised Investment Funds (SIFs), a new category of investments for the more sophisticated investors with a minimum bet of Rs 10 lakh, saw the launch of four strategies, he said.

The total number of folios stands at over 10,200 and the there were inflows of over Rs 2,007 crore into the four schemes in October, he said, adding that the overall SIF AUM stands at Rs 2,010 crore now.