Equity Mutual Funds Continue To Witness Net Outflows For 8 Months In A Row

The equity-oriented mutual funds witness net outflow for the eighth month shows the data by the (Association of Mutual Funds in India) AMFI. The open-ended Growth and Equity oriented schemes witnessed an outflow of Rs 10,468.02 crore in February 2021 as compared to outflow of Rs 9,253.22 crore in January 2021. 

The outflows were witnessed across most of the categories of equity fund baring multi cap fund, large & mid cap fund and focused funds which saw inflows in February. 

“With markets touching all-time highs in February, it provided a good profit booking opportunity for investors. Moreover, the elevated valuation levels could have also triggered rebalancing of portfolios,” says Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.  

Whereas the large cap fund saw an outflow of Rs 1,280.15 crore, the small cap fund saw an outflow of Rs 451.58 crore and Equity Linked Saving Scheme (ELSS) witnessed Rs 847.84 crore of outflow in February. 

When it comes to the income and debt-oriented schemes, it witnessed an inflow of Rs 1,734.63 crore in February 2021 as compared to outflow of Rs 33,408.76 crore in January 2021. The boost came on the back of inflows in liquid funds which stood at Rs 17,301.57 crore in February 2021 as compared to outflow of Rs 45,315.69 crore in January 2021. 

“Profit booking in debt schemes with bond yields moving up, and in equity schemes with market indices at all time high is reflective of investors moving in tandem with market scenarios,” says N S Venkatesh, Chief Executive, AMFI.

Systematic Investment Plans (SIPs) Asset Under Management and also Retail Equity folios, are at an all-time high at Rs 4.21 lakh crores and Rs 8.07 crores respectively, indicating continued disciplined approach adopted by the retail Mutual Fund investors. 

“This growth has also aided in overall Net Average AUMs rising 14.17 per cent to all time high at Rs 32.29 lakh crores,” says Venkatesh. However, the monthly SIP contribution for February 2021 has come down by Rs 495 crore owing to weekend dawning at the end of February and the shortfall would get accumulated and reflected in March 2021 monthly data, he added.