India’s total mutual fund AUM as on October 31, 2020 reached its highest ever at Rs 28.22 lakh crore, while Average AUM stood at Rs 28.33 lakh crore. This was due to rise in Retail SIP contribution and surge in Net Flows in overall Debt schemes, according to MF industry body, the Association of Mutual Funds in India (AMFI) earlier today.

The Mutual Fund Industry witnessed an overall positive flows at Rs 98,575.96 crore in October 2020.

During October 2020, Mutual Fund SIP accounts grew to 3.37 crore, leading to a rise in monthly SIP contribution to Rs 7,800 crore, compared to Rs 7,788.37 crore in September 30, 2020. Total SIP AUM rose from 3,35,571.57 crore as on September 30, 2020 to Rs 3,42,018 crore as on October 31, 2020.

Akhil Chaturvedi, Associate Director and Head of Sales and Distribution, Motilal Oswal AMC said, “Broadly, as the markets made all-time high today investors are getting cautious and trying to reduce equity weightage. There is a feeling that markets are ahead of fundamentals and there could be some volatility in coming times, hence appetite for equities is low for now.”

Open-ended equity schemes overall, saw an outflow of Rs 2,724.95 crore. But, categories like Large & Mid Cap Fund saw positive flows of Rs 256.74 crore and Sectoral/Thematic Funds witnessed net flows of Rs 2,214.67 crore due to two NFOs during October 2020.

Aashish Somaiyaa, Chief Executive Officer, White Oak Capital said, “The sharp fall in markets in March 2020 would have certainly scared equity investors. Usually even as they may be worried, investors prefer not to withdraw when markets are down but it is quite unfortunate that now when values are being restored we are seeing large number of investors bolt for the door. Committing to investments on the way up and giving up on investments after a fall is not the way to create wealth.”

The outflow significantly moderated for Hybrid scheme category at Rs 1,681.87 crore for October 2020, as compared to Rs 4,219.01 crore in September 2020 and Rs 4,819.45 crore for August 2020.

“What is surprising is that hybrid/ asset allocation funds which are conservatively managed are also witnessing very high redemptions. This trend is not understandable as broadly these funds are apt to ride through volatile times and best suited for investment in these times of uncertainty given that manage mix of equity & debt allocations depending on the objective the fund,” pointed out Chaturvedi.

The Gold ETFs and FoF categories continued to witness net inflow of Rs 384.21 crore and Rs 337.96 crore during the month.

On the Debt side, surge in the Net Flows, at Rs 1.1 lakh crore overall, during October 2020 was driven by Liquid, Money Market, Corporate Bond Fund, Short Duration, Ultra short duration, Low Duration and Banking
and PSU Fund categories.

Speaking on the occasion, N S Venkatesh, CEO, AMFI said: “Rise in both SIP contribution and SIP AUMs during October 2020 and continued slowing outflow in equity schemes reinforces the retail
investor confidence in the mutual fund as an asset class.”

Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at [email protected]

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