Volatility dents equity fund inflows in October

Mumbai: Equity mutual fund inflows declined nearly 14 per cent to Rs 32,994 crore in October from Rs 38,306 crore in September, reflecting the impact of market volatility and correction, according to data released by the Association of Mutual Funds in India (Amfi) on Wednesday.

Despite the decline, October marked the 60th consecutive month of net inflows into equity mutual fund schemes. Their total assets under management stood at Rs 37.14 lakh crore as on October 31.

Systematic Investment Plan (SIP) contributions also eased marginally to Rs 32,160 crore from Rs 32,490 crore in September. The number of contributing SIP accounts declined to 10 crore from 10.06 crore.

Amfi chief executive Venkat Chalasani said market volatility might have affected inflows, but factors such as the improved assessment of Indian equities by foreign brokerages, lower crude oil prices and strong corporate earnings were positive for the market. He also pointed to strong bank credit growth as an indication of underlying economic strength.

Despite volatility, SIP investments in October were about 10 per cent higher than the over Rs 29,000 crore recorded in the same month last year.

Foreign institutional investors (FIIs) sold a net Rs 34,843 crore worth of Indian equities in October. However, domestic retail investors largely continued their SIP investments, reflecting confidence in India's long-term growth prospects. Meanwhile, gold and silver exchange-traded funds attracted inflows of over Rs 3,000 crore each. A total of 28 new fund offerings across categories mobilised Rs 3,829 crore during the month.

ABOUT THE AUTHOR

The Hans India