AMFI DATAEquity MF inflows crossed the Rs 8,000 crore mark in July 2019, bolstered by the resilience of investors in a month when markets slipped by 5% and saw the worst July in as many as 17 years. Thanks to Systematic Investment Plans (SIP), which brought in Rs 8,324 crore in July 2019, the net inflows number continued to stay in the positive for the equity MF category. In June 2019, the equity MF net inflow was Rs 7,663 crore. The month of July also marked a turnaround for the debt mutual funds, after corporate treasuries in June had pulled out funds to show boosted balance sheets. Net inflows in July 2019 jumped to Rs 61,845 crore against net outflows of Rs 1.71 lakh crore due to quarter-end accounting and payment needs of institutions. Here is a recap of how the MF industry performed in July 2019. Read on.

Additional read: Equity Funds Witness Rs 7,600 Cr Net Inflows In June, SIPs Strong; Liquid Funds Hit By Quarterly Redemptions

Equity mutual funds

Equity funds’ assets under management (AUM)  stood at Rs 6.84 lakh crore, with multi cap funds and large cap funds being the biggest categories.

July saw large cap funds receiving Rs 1,914 crore in net inflows compared to Rs 1,509 crore in June. In comparison, multi cap funds witnessed a sharp 82% drop in net inflows at Rs 327 crore compared to Rs 1,835 crore in June.

Interestingly, mid cap funds showed a 39% rise in net inflows at Rs 1,393 crore compared to June, as investors continued to take advantage of cheaper valuations after the ongoing correction in midcaps.

Focussed equity funds, also a highlight, witnessed 65% month on month rise in net inflows at Rs 1,872 crore.

The number of equity MF folios, i.e investor accounts, went up to 5.94 crore in July from 5.88 crore in June.

Indian equities were under severe selling pressure in July because of worries over a slew of budget proposals and a further slowdown in the economy. The benchmark index Sensex was down 4.86% and the Nifty slipped 5.69% in July, the sharpest monthly decline since October last year. Sensex, and Nifty logged the worst July show in 17 years.

Commenting on the July 2019 monthly Mutual Fund data, N S Venkatesh, CEO, AMFI said: “Despite difficult month and volatile market conditions, the overall sentiment towards debt, equity and hybrid mutual fund schemes has been positive, and equity SIP contributions are at all-time high over last three years. This conveys signs of maturity on the part of retail investors and is reflective of continued investor trust on the Indian MF Industry.”

Equity funds Flows

Equity funds
Category No. of Schemes No. Of Folios Net Inflow (+ve)/
Outflow (-ve)
for the month of July 2019
Net Inflow (+ve)/
Outflow (-ve)
for the month of June 2019
Net Inflow (+ve)/
Outflow (-ve)
% change
Multi Cap Fund 34 85,65,434 326.9 1,835.45 -82.19
Large Cap Fund 30 90,21,930 1,914.91 1,509.52 26.86
Large & Mid Cap Fund 24 44,55,330 697.13 489.24 42.49
Mid Cap Fund 25 62,44,264 1,393.51 844.6 64.99
Small Cap Fund 21 50,52,559 835.19 927 -9.90
Dividend Yield Fund 6 4,96,679 -25.02 -11.19 123.59
Value Fund/Contra Fund 18 44,14,290 38.68 38.07 1.60
Focused Fund 20 30,50,416 1,872.96 650.62 187.87
Sectoral/Thematic Funds 95 64,29,761 320.77 879.8 -63.54
ELSS 43 1,16,70,306 737.48 500.03 47.49
Sub Total 316 5,94,00,969 8,112.52 7,663.14 5.86

Debt funds

It was more of a comeback in July 2019 for debt funds, which have an AUM of Rs 10.78 lakh crore.

The money that was pulled out in June, trickled back in. Liquid funds net outflows in June had pulled down debt MF segment flows to negative. This situation reversed somewhat in July. Liquid funds saw over Rs 45,000 crore net inflows in July 2019, helping the debt MF segment as a whole post over Rs 61,000 crore net inflows.

Out of 16 debt MF categories, 9 saw positive net inflows in June. Credit risk funds continued to see outflows. It lost Rs 3,411 crore in July, a 26% rise compared to Rs 2,695 crore outflow in June.

Importantly, the net outflows in low duration funds were greatly arrested to just Rs 223 crore in July after June witnessed Rs 4,689 crore outflows. Dynamic bond funds, a popular category, also saw outflows capped at Rs 122 crore.

In fact, in short duration funds the inflow picture reversed in July, with Rs 586 crore inflows. However, there was no such luck in medium duration funds or medium to long duration funds that continued to post outflows.

Gilt funds, after a great run, seem to see profit booking. About Rs 120 crore was pulled out as net ouflows in July.

The number of debt MF folios rose to 5.41 crore in July compared to 5.34 crore in June.

Debt funds
Category No. of Schemes No. Of Folios Net Inflow (+ve)/
Outflow (-ve)
for the month of July 2019
Net Inflow (+ve)/
Outflow (-ve)
for the month of June 2019
Net Inflow (+ve)/
Outflow (-ve)
% change
Overnight Fund 23 25,332 6,020.81 -4,062.55 N.A.
Liquid Fund 40 16,08,355 45,441.23 -1,52,431.65 N.A.
Ultra Short Duration Fund 26 6,25,353 600.95 -1,926.12 N.A.
Low Duration Fund 26 9,11,841 -223.48 -4,689.22 -95.23
Money Market Fund 18 3,00,940 5,062.86 -3,831.97 N.A.
Short Duration Fund 28 2,75,579 586.17 -607.48 N.A.
Medium Duration Fund 16 2,27,819 -936.54 -1,158.81 -19.18
Medium to Long Duration Fund 13 1,05,536 -60.25 -156.34 -61.46
Long Duration Fund 2 22,181 58.74 22.37 162.58
Dynamic Bond Fund 28 2,10,881 -122.36 -786.32 -84.44
Corporate Bond Fund 20 2,25,630 2,573.14 -131.18 N.A.
Credit Risk Fund 20 5,41,549 -3,411.35 -2,694.87 26.59
Banking and PSU Fund 18 98,344 5,913.98 799.39 639.81
Gilt Fund 22 83,926 -119.68 196.76 N.A.
Gilt Fund with 10 year constant duration 4 19,014 80 44.54 79.61
Floater Fund 7 1,35,243 381.3 64.13 494.57
Sub Total 311 54,17,523 61,845.54 -1,71,349.32 N.A.

Hybrid funds

About Rs 3.37 lakh crore assets are is in hybrid funds. This is led by three categories – balanced hybrid fund/aggressive hybrid fund, dynamic asset allocation/balanced advantage fund and arbitrage funds.

Hybrid funds saw Rs 7,393 crore coming in as net inflows in July 2019, almost a nine-fold jump compared to Rs 862 crore in June 2019.

Hybrid funds are proxy plays to equity funds. So, as equity MFs gained, it is natural that hybrid funds were back in the reckoning.

The number of hybrid MF folios rose to 96.37 lakh in July compared to 96.01 lakh in June.

Hybrid funds
Category No. of Schemes No. Of Folios Net Inflow (+ve)/
Outflow (-ve)
for the month of July 2019
Net Inflow (+ve)/
Outflow (-ve)
for the month of June 2019
Net Inflow (+ve)/
Outflow (-ve)
% change
Conservative Hybrid Fund  21  4,23,972  -284.31  -309.49 -8.14
Balanced Hybrid Fund/Aggressive Hybrid Fund  33  54,62,731  673.75  -1,909.66 N.A
Dynamic Asset Allocation/Balanced Advantage  21  25,07,535  1,323.88  476.36 177.92
Multi Asset Allocation  7  6,10,655  90.99  -16.85 N.A.
Arbitrage Fund  23  2,64,673  5,809.81  3,165.59 83.53
Equity Savings  23  3,68,029  -220.91  -543.34 -59.34
Sub Total  128  96,37,595  7,393.21  862.61 757.08
Author
Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. He can be contacted on kumarsroy@rupeeiq.com