Amfi data released for the month of December said investors withdrew a net Rs 10,147.12 crore, lower than previous month’s Rs 12,917.36 crore from equity oriented funds thanks to selloff in all but two categories.
Equity mutual funds saw a total inflow of Rs 26,073.16 crore and outflow of Rs 36,220.28 crore. Both gross inflows and gross outflows increased substantially compared to the last month.
Largecap funds saw the biggest outflow at Rs 3,876.39 crore, while multicap funds saw withdrawals of Rs 3,540.77 crore. Contra funds, midcap funds and focussed funds also saw outflows of more than Rs 1,000 crore each. On the other hand, the sectoral fund received net inflows of Rs 3,412.08 crore and the dividend yield fund saw flows of Rs 1,490.15 crore.
“The continuation of net outflows from equity funds could be attributed to profit booking/portfolio rebalancing as markets continue to touch new highs. In fact, the net outflow number would have been higher had it not been for the NFOs across multiple equity categories which collected Rs 7,600 crore,” said Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.
Outflows during the month forced domestic institutional investors, which mostly comprise mutual fund managers, to sell a net Rs 37,293.53 crore worth of stocks, against selling of Rs 48,339.44 crore in the previous month. This is at a time when FIIs poured in Rs 62,015.68 crore in the equity markets.
NS Venkatesh, CEO of Amfi said, markets are at an all-time high and most of the people are booking profits and staying on the sidelines, leading to net outflows.
SIP inflow in December rose to a “surprising” Rs 8,418.11 crore from Rs 7,302.16 crore in the previous month. Total number of SIP folios saw a marginal jump to 3.47 crore from 3.40 crore. The assets under management (AUM) from SIPs rose to Rs 3.98 lakh crore.
Venkatesh said the sharp jump in SIP flows is due to processing of some of the SIP contributions for November in December. The last three days of November were holidays; hence no SIP could be processed.
He believes some more profit booking is likely in the coming months if the market continues to gain, indicating more outflows from equity funds.
On the other hand, debt mutual fund schemes continued to receive inflows during the month as they cumulatively saw fresh net investments of Rs 13,862.77 crore. However, it was much less than the previous month.
Corporate bond funds saw inflows of Rs 8,609.77 crore followed by overnight funds and liquid funds. Meanwhile, money market funds saw outflows of Rs 11,896.17 crore.
The total mutual fund AUM as on November 31 rose to highest ever Rs 31 lakh crore, thanks to net inflows of Rs 2,967.86 crore. It should be noted that much of the gains in AUM could be due to mark-to-market gains in funds as BSE Sensex gained over 8 per cent during December, while BSE Midcap added 6 per cent and BSE Smallcap rose about a per cent.