Equity schemes saw robust inflows for the fifth consecutive month, taking the cumulative net inflows in the year to date to about Rs 25,000 crore, more than the combined outflows seen in CY13 and CY12. What?s more, the inflows this year have recouped about 75% of the net outflows seen in the preceding five years.
Equity schemes saw inflows of R5,217 crore in August, taking total inflows in the last three months to R23,341 crore, latest data from mutual fund industry body Amfi shows. Notably, inflows in July amounted to R10,815 crore, the highest in six and a half years. This year MF schemes have seen inflows to the tune of R24,967 crore compared with outflows of R8,708 crore in calendar year 2013.
Experts believe the market rally in the past few months is attracting investors back to the equity market, which had remained subdued for the better part of the last six years. The Nifty gained 2.8% in August and is up about 29% in the year to date. In May, the BJP government bagged the largest single-party mandate since 1984, helping the Sensex past the 25,000-point level, driving overseas investors to India and sparking hopes of a new, secular bull run in the country?s equity market.
?We are enthused with the broader direction of inflows for equity MFs and believe that the trend of positive flows is showing signs of becoming entrenched,? said a Deutsche Bank Markets Research report.
While the momentum of inflows had started to build from November 2013 onwards, it seems to have become meaningfully entrenched since May 2014, the bank had said last month.
Mid-cap and sectoral infrastructure funds have seen an increase in demand in the past two to three months, according to industry officials. In the year to date, BSE Sensex has returned 29% compared with the BSE MidCap and BSE SmallCap’s returns of 47% and 66%, respectively.
What has also helped the industry is the increase in the number of new fund offerings since last September. NFOs have collected more than R7,000 crore in the year 2014 compared with collections of less than R1,000 crore for the whole of last year. Closed-ended funds, in particular, have gained popularity since September last year, with several top fund houses launching such schemes.
The MF industry has been struggling ever since the entry load was banned in August 2009, with just 26 months of net inflows in equity schemes. However, the sentiment seems to have improved in recent times, with net inflows in every month except one since last November. Overall assets under management of the MF industry rose 0.63%, or by R6,372 crore, to R10.12 lakh crore from R10.06 lakh crore in July 2014, a record.
