Braving volatility, mutual funds see Rs 1 lakh crore inflows in August

Among debt-oriented schemes, liquid funds saw an infusion of Rs 79,428 crore last month, as against Rs 45,441 crore in July.

Of the total inflows, liquid funds alone saw an impressive over Rs 79,000 crore in August. (Representational Image)

Mutual fund (MF) houses witnessed an overall inflow of Rs 1.02 lakh crore in the month of August, as against Rs 87,000 crore in July, despite the volatility in the capital markets, according to figures released by the Association of Mutual Funds in India (AMFI).

Of the total inflows, liquid funds alone saw an impressive over Rs 79,000 crore in August. Open-ended equity schemes witnessed an infusion of Rs 9,152 crore, while there was a small outflow of Rs 62 crore in close-ended equity plans, taking total equity inflows to Rs 9,090 crore last month. In July, net inflow in such schemes stood at Rs 8,092 crore.

Among debt-oriented schemes, liquid funds saw an infusion of Rs 79,428 crore last month, as against Rs 45,441 crore in July. Besides, gold exchange-traded funds saw a total inflow of Rs 145 crore against an outflow of Rs 17.66 crore, AMFI said. The equity inflow stood at Rs 9,152crore, against Rs 8,112 crore previously.

AMFI said mutual funds’ asset base rose to Rs 25.47 lakh crore in August, a rise of 4 per cent as against in the previous month, on the back of robust inflows in equity and liquid schemes. The industry logged in assets under management (AUM) of Rs 24.53 lakh crore in July-end, according to AMFI data. Fund managers attributed growth in the overall asset base to higher retail participation and robust inflows in equity schemes and liquid funds.

“Retail investor interest in equity mutual funds, for the fourth time in succession, continues to be steady, displaying maturity despite uncertain economic and volatile market situation. Net inflows, largely in all categories of equity funds, especially in small and mid-cap funds, as also in the ELSS (equity-linked saving scheme) segment, signify heightened confidence and interest in emerging businesses and disciplined tax planning,” AMFI CEO NS Venkatesh said.

On September’s outlook, he said, “On the equity side, SIPs (systematic investment plans) would witness robust flows and on the debt side, liquid funds may see volatility owing to quarter-end phenomenon.”

Inflows in MFs through SIPs in August stood at Rs 8,230.76 crore, a slight fall as compared with Rs 8,324.28 crore a month ago. The total AUM of SIPs amounted to Rs 271,104 crore as on August 31, 2019. There were 2.81 crore SIP accounts as of August 2019.

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The MF industry added 4.81 lakh folios — numbers designated to individual investor accounts, though an investor can have multiple accounts — last month to a total of 8.53 crore.

The Indian MF industry is eyeing a four-fold rise in AUMs to Rs 100 lakh crore from the existing level of Rs 25 lakh crore, and a five-fold rise in investor base to 100 million (from existing 20 million) by the next decade, according to the AMFI-BCG Vision Document.

Diversifying the distribution outreach by leveraging the wide network of banks and post offices across the country, significantly augmenting the distribution base by another four lakh, strengthening direct and digital channels thus ensuring last-mile connectivity, and achieving inclusion through tech-led simplified entry-level on-boarding and offering simple savings solutions, would be key to MF industry adding 80 million new investors and accomplishing the Rs 100 lakh crore AUM opportunity, the vision document added.