Net Inflows in Equity MFs Hit 11-Month High, Gold ETFs See 7-Fold Jump

AMFI data for February 2020 showed that net inflows into open ended mutual funds increased to Rs 10,796 crore (US$ 1.54 billion) which is the highest since March 2019. Large cap funds, multi-cap funds, mid-cap funds and small-cap funds witnessed net inflows in the range of Rs 1,400 to 1,600 crore (US$ 200.31 to 228.93 million) which were similar to the flows received in January 2020. However, sectoral/thematic funds saw a large jump from just Rs 3.8 crore (US$ 0.54 million) in January 2020 to Rs 1,928 crore (US$ 275.86 million) in February 2020, some of it due to new launches in February. Gold Exchange Traded Funds (ETFs) saw a huge jump in net inflows from Rs 202 crore (US$ 28.90 million) in January 2020 to Rs 1,483 crore (US$ 212.19 million) in February 2020.

“The surge in equity scheme inflows is very heartening to see. People have bought more, even as the market has dipped. There’s buying in both large and mid-cap funds, quite contrary to the notion that large cap is not delivering value and hence avoided by investors,” said Mr Swarup Mohanty, CEO, Mirae Asset Mutual Fund.

On the other hand, Hybrid funds continued to witness outflows, similar to what they have been witnessing for most of the past year. Despite a significant sales push by AMCs towards dynamic asset allocation funds, flows into the category have been slow.

Similar to past year, debt funds continued to see a rotation from credit risk funds to corporate bond funds and banking and PSU debt funds. This is majorly due to the multiple defaults and downgrades hitting the NAVs of such funds. Debt funds witnessed a high level of volatility in February due to the downgrade of Vodafone Idea as a result of the Supreme Court verdict on its AGR dues.

Source: IBEF

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