Equity mutual fund (MF) schemes raked in a net of Rs 38,239 crore in August, a 3 per cent month-on-month (M-o-M) increase despite higher volatility. The inflows were supported by strong collections from new fund offerings (NFOs) and a surge in systematic monthly flows.
The August tally is the second-highest inflow into equity schemes during a calendar month.
The equity market closed with gains in August despite a significant correction early in the month. The Nifty 50 declined almost 4 per cent in the first four sessions following global cues but staged a strong comeback in the latter half of the month to close with 1.1 per cent gains.
“The correction in the markets in the initial part of August provided investors with a good buying opportunity. This is reflected in the strong net inflow numbers for August across the equity categories,” said Himanshu Srivastava, associate director – manager research, Morningstar Investment Research India.
According to experts, the movements in the market have not had a major impact on the equity fund inflows, largely owing to growing systematic investment plan (SIP) flows. Last month, inflows through SIPs went up nearly 1 per cent M-o-M to a new all-time high of Rs 23,547 crore.
NFOs in popular categories were also a factor. Six NFOs came to a close last month, collecting Rs 11,067 crore. Five of these NFOs, which were in the sectoral and thematic space, garnered over 92 per cent of the aggregate collections.
“Net flows continue to remain encouraging with SIP and NFO inflows. The sectoral/thematic category of schemes witnessed strong inflows due to NFOs. NFOs seem to be the preferred route for investors to take a lumpsum allocation to mutual funds since schemes have the flexibility to invest over a stipulated time period,” said Manish Mehta, national head – sales, marketing and digital business, Kotak Mahindra AMC.
Equity MF schemes have collected around Rs 1.7 trillion so far in the financial year (FY) 2025. The tally is 92 per cent of the total collections of Rs 1.8 trillion in FY24.
The robust inflows and the equity market rally led to sharper growth in the assets under management (AUM) of equity schemes. With a 28 per cent rise during the five-month period, the AUM surged to Rs 30 trillion for the first time in August. The equity MF AUM is 45 per cent of the total assets being managed by the industry.
First Published: Sep 10 2024 | 3:35 PM IST
