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Equity mutual funds see outflow for first time in 4 years

Equity mutual funds saw their first outflow in four years in July as profit booking by investors saw them making net withdrawals of Rs 2,480.35 crore. In the preceding month, the net inflows into these schemes stood at Rs 240.55 crore.

The schemes have been showing a declining trend since April, attracting Rs 11,723 crore in March, Rs 6,213 crore in April and Rs 5,257 crore in May.

Data from the Association of Mutual Funds in India (Amfi) on Monday showed that the outflows were maximum in the case of multi-cap funds at Rs 1,033 crore (net outflows of Rs 778 crore in June). It was followed by mid-cap, contra and focused funds. Barring equity-linked saving schemes that saw an inflow of Rs 279 crore) and focused fund (Rs 535 crore) categories, all the other equity segments witnessed a net outflow.

Experts said that the net outflow was because of profit booking by investors amid concerns about expensive valuations in the market despite the rising number of coronavirus cases in India and an economy under contraction.

Overall, the mutual fund industry witnessed a net inflow of Rs 89,813 crore across all segments last month, much higher than Rs 7,265 crore seen in June. This inflow has been attributed to the infusion in liquid and low-duration funds. The assets under management (AUM) of the industry as a whole increased 5 per cent to Rs 27.3 lakh crore.