Mumbai: October 11: The stock market rally seen post the recent corporate tax cut announcement by the finance minister (FM) Nirmala Sitharaman saw many equity mutual fund (MF) investors exiting their investment and as a result the MF sector witnessed lower net inflows at Rs 6,489 crore. The inflow to the equity segment in the month of September was the lowest in last four months of calendar 2019. The open ended equity schemes witnessed an inflow of Rs 6609 crores as compared to closed ended schemes that experienced an outflow of Rs 120 crores resulting in the net equity inflows of Rs 6489 crores.
However, while the overall trend seemed like an outflow in September, the flows in equity mutual funds through SIPs remain stable with an inflow of Rs. 8263 crores in September which is marginally higher as compared to the previous month. This is the 10th consecutive month when the SIP collections have remained above the mark of Rs 8000 crores. This can mainly be attributed to the positive growth in mutual funds market from retail investors.
The new SIP account opening are showing a stable growth and we believe this can compensate for the mixed inflows seen in the Lumpsum investments. The SIPs will show complete outperformance once the markets start to pick up again, regional head of a leading MF distributor said.
Gautam Kalia, head- investment solutions, Sharekhan by BNP Paribas, said “This is a wait and watch scenario for the investors, that will now look for a broad-based economic recovery before they start allocating larger funds in the equity markets.
The positive however is that the net outflows in September this year are far lower than September last year which can again be attributed to the growth in the sticky money in mutual funds through SIP investments.
Among equity mutual funds multi-cap funds witnessed the maximum inflows followed by large cap funds. Sectoral/Thematic and Dividend yield funds experienced a maximum outflow as compared to other equity categories.
However, if the equity markets continue to show growth a positive upward trend in mutual funds too can be expected, Kalia added.