Net inflows in equity mutual funds see a 95% fall in June compared to previous months because of the recent rebound in the market, which forced investors to pull back all of their money and stay on the sidelines.
The Equity mutual fund schemes scored the lowest monthly flows in four years of Rs 240 crore in June, compared to Rs 5,246 in May.
Though the average assets under equity funds management increased to Rs 6.89 lakh crore in June from the previous month of Rs 6.31 lakh crore due to recent gains in the stock market and systematic investment plans (SIPs) stable flows.
Mutual Fund (SIP) Analysis
Overall Systematic Investment Plan’s inflows in June reduced to Rs 7,927 crore compared to previous months of Rs 8,123 crore.
There is a low belief in the current equity rally prompting investors to book profit as they cross par value. Due to the ongoing and rising pandemic, investors are worried about the uncertainty and how the economy will shape up in the next couple of years. The Nifty and Sensex have come to almost 40 per cent from March 23 low because of central banks’ easy monetary policy in developed economies.
Debt schemes also witnessed an increase in the net inflow of Rs 2.862 Crore with an AUM of Rs 12.36 lakh crore in June. However, the liquid fund recorded an outflow of Rs 44.223 crore as corporates withdrew funds considering advance tax payment and quarter-end.
Factors Affecting Net Inflows
After Franklin Templeton shut down its six schemes, many investors withdrew funds from various debt schemes.
This shifted investors’ focus to investing in gold. Hence, Exchange-Traded Funds (ETFs) mirroring gold price saw an increase in investment of Rs 494 crore in June.
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