Inflows in equity mutual funds slowed considerably in January 2022, down 40.6 percent from the previous month to ₹14,888 crore, Association of Mutual Funds in India (AMFI) data showed. Net inflows in equity MFs were seen at ₹25,077 crore in December 2021.
The slowdown in inflows was mainly on the back of major volatility in the equity markets during the month on concerns regarding the omicron variant, rising inflation, escalating Russia-Ukraine tensions and US Fed indicating a sooner-than-expected rate hike.
Overall, the mutual fund industry registered a net inflow of ₹35,252 crore during the period under review compared to a net outflow of ₹4,350 crore in December, AMFI data showed.
The assets under management (AUM) for equity schemes were seen at ₹13.56 lakh crore in January while AUM of the total MF industry came in at ₹38.8 lakh crore during the month. In December 2021, the total MF industry AUM stood at ₹37.7 lakh crore.
“January was a reasonably good month. Net assets under management crossed 38 lakh crore for the first time. From February, there could be certain apprehensions in the mind of investors because of corrections in the market, but we expect to see good investments via SIPs since it’s meant for long-term investment,” NS Venkatesh, CEO, AMFI, said in a statement.
Among equity segments, all, except for value funds witnessed net inflows in January. The Flexi-cap category saw the highest inflows worth ₹2,527 crore followed by thematic funds at ₹2,073 crore for the month.
Smallcap funds witness their highest inflows since August 2021 worth ₹1,498 crore. This was the fourth straight month of inflows for the smallcap funds.
Meanwhile, the net inflows in the debt segment came in at ₹5,087 crore in January 2022 as against net outflows of ₹49,154 crore in the previous month.
SIP investments rose for the ninth straight month in January with the total number of SIP accounts crossing 5 crores for the first time ever.
“Retail investors continue to maintain optimistic stance on investing on market dips. While, on one hand, we are seeing FII outflows, on the other hand, we are seeing positive flows from domestic investors. This is a very positive change amongst investors, it is always advisable to buy on dips for better rupee-cost averaging resulting in good outcomes in long term," said Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC.
Chaturvedi added that it is also encouraging to see positive flows in the dynamic category, as most asset-allocation models are maintaining a good mix of Debt and Equity allocation to benefit from market corrections and increasing equity allocations.