Investors raised investments across fund categories in the first half of the 2022-23 financial year (H1FY23) but increases in gross outflows, or redemptions have weighed on the net inflows tally, a report by Business Standard stated.
The report informed that while investments in equity schemes in September were 9 percent more than that in April, redemptions were 29 percent higher. Similarly, in the case of passive schemes, inflows rose just 16 percent but gross outflows were more than double that of the April number, it added.
In simple terms, while fresh money is flowing into many mutual fund (MF) scheme categories, the pace of redemption by existing investors is more than before, the report revealed.
"The comparatively higher growth in outflows has weighed on the net inflows in equity and hybrid schemes for three-straight months of June, July and August. In fact, hybrid schemes have witnessed negative inflows for the last four months (September too) as investors took out large amounts from arbitrage funds," it further pointed out.
After declining for two months in a row, contribution to equity mutual funds rose in the month of September, the AMFI (Association of Mutual Funds in India) data reveals. The inflow to equity mutual funds touched ₹14,099 crore last month.
This was more than double of equity inflow in the month of August i.e., ₹6,119 crore. and even higher than the July inflow of ₹8,898 crore, but lower than the June inflow of ₹15,497 crore.
However, it is worth noting that the outflow of debt-oriented funds was a whopping ₹65,372 crore.
At the same time, hybrid schemes saw an outflow of ₹2,687 crore. The index and exchange-traded funds saw a massive increase last month. Index funds saw an inflow of ₹2,317 crore, gold ETFs saw an inflow of ₹330 crore and other ETFs witnessed an inflow of ₹10,807 crore.
