Inflows into equity mutual funds was down 14 per cent last month at ₹35,943 crore against ₹41,887 crore logged in October as investors toned down their expectations with the steady dip in the market.
SIP inflows were also down marginally at ₹25,320 crore last month against ₹25,323 crore. Equity markets have been volatile with foreign investors pulling out funds.
Though thematic and flexi cap funds received the highest inflow of ₹7,658 crore and ₹5,084 crore, it was lower compared to the previous month inflow of ₹12,279 crore and ₹5,180 crore in these funds, according to the Association of Mutual Funds in India data released on Tuesday.
Three thematic new fund offers mopped up ₹2,751 crore leading to an overall inflow of ₹4,052 crore through NFOs.
Akhil Chaturvedi, ED and CBO, Motilal Oswal AMC said investors opted to wait and watch amid heightened volatility due various macro-economic factors including the US election results and this led to fall in lumpsum flows including flattish SIP numbers.
“We also observe rotation towards higher-risk categories such as small cap funds from low-risk categories like Large caps and hybrid funds, he said
Inflows into hybrid funds also moderated to ₹4,123 crore against ₹16,863 crore logged in October while that of debt funds were lower at ₹12,916 crore (₹1.57 lakh crore).
Venkat Chalasani, CEO, AMFI said defying a tumultuous month in the equity market, the mutual fund industry’s assets reached a new pinnacle of ₹68 lakh crore (₹65.25 lakh crore) driven by robust inflows into equity schemes.
On the mutual funds rush to launch thematic fund NFO, he said investors should know the risks involved in these schemes as it is not going to be a smooth ride upwards even though the long term growth of Indian economy remains intact.
Sanjay Agarwal, Senior Director, CareEdge Ratings said the growth in debt funds net inflows was at the shorter end of the curve as over 90 per cent of the inflows were in the overnight, ultra short duration, low duration and money market funds.
Deepak Ramaraju, Senior Fund Manager, Shriram AMC said passive funds have experienced challenges with reduced NFO activity, fall in Nifty and depreciation in gold prices.
Himanshu Srivastava, Associate Director- Manager Research, Morningstar Investment Research said investors preferred to wait on the sidelines for more cues before taking further investment decision as both inflows and redemptions were lower last month.
