After eight months of consecutive outflows, equity mutual funds witnessed a net inflow of Rs 9,115 crore in March amid correction in the stock market. Barring multi-cap and value fund categories, all the equity schemes saw inflow last month, data from the Association of Mutual Funds in India (Amfi) showed on Thursday. However, investors pulled out Rs 52,528 crore from debt mutual funds last month, after investing Rs 1,735 crore in February, owing to advance tax payments and other year ending commitments. Overall, the mutual fund industry witnessed a net outflow of Rs 29,745 crore across all segments during the period under review, compared with a net inflow of Rs 4,090 crore in February.
The inflows meant assets under management of gold ETFs climbed by over 4 per cent to Rs 13,503 crore at the end of August from Rs 12,941 crore at July-end.
Except for September quarter, which had net inflows of $196 million, all other quarters had outflows.
As the coronavirus pandemic is triggering fears of a global recession, foreign investors have started rowing back from the Indian capital markets by withdrawing a massive over Rs 1 lakh crore in March after remaining net buyers for six consecutive months. In order to contain the spread of coronavirus, lockdowns have become a norm the world over and have led the FPIs to adopt a cautious stance, market experts said.
Polarisation and the increase in index weight of a few a stocks have weighed on performance. The worst performers include Nippon India Large Cap and HDFC Top 100 (2.6 per cent).
Morningstar India's investment conference from November 1-2, 2012 in Mumbai for retail investors, brokers, financial advisors.
Outflows are likely to continue, experts say, till such time as the markets see a significant correction.
The unlocking of the economy since June led to a significant recovery in various macro, micro and high-frequency data points, resulting in the equity markets surpassing their previous lifetime highs.
Equity mutual funds witnessed an outflow of Rs 9,253 crore in January, making it the seventh consecutive monthly withdrawal, primarily due to profit booking and portfolio rebalancing amid markets touching new highs. The pace of outflows from equities has however slowed for the third month and Gautam Kalia, head - Investment Solutions, Sharekhan by BNP Paribas said that it will likely turn positive soon as investors get used to the new normal. In addition, investors pulled out Rs 33,409 crore from debt mutual funds last month after investing Rs 13,863 crore in December, data from the Association of Mutual Funds in India showed on Tuesday.
The mid-cap universe - comprising firms that rank 101-250 in terms of m-cap - could see as many as 17 new stocks move out. Similarly, over half a dozen stocks could exit the large-cap universe, which is defined as the top 100 entities in terms of m-cap.
The assets under management of the 44-players mutual fund industry stood at Rs 24.55 lakh crore in May-end from Rs 23.93 lakh crore in April-end.
Experts believe FPIs will keep a close watch on coronavirus pandemic, its spread and likely impact on the economy while making decisions about investment into India.
MFs have benefited from a shift to financial assets from physical assets like real estate and gold.
Top officials said asking employees other than the fund management team to mandatorily invest a fifth of their salary goes against the principle of natural justice.
In the entire 2017, FPIs put in a collective amount of Rs 2 trillion in equity and debt markets
Issuing guidelines for enhanced disclosures by CRAs, the watchdog has called for having a uniform Standard Operating Procedure in respect of tracking and timely recognition of default.
Market players say following the tax cuts, the market mood had changed from bearish to positive, which should help sustain the rally.
Taking credit risks in shorter-tenure funds can help jack up returns considerably, boosting sales.
Several of the mutual fund schemes have plans like dividend, growth and bonus.
Fundraising via equity NFOs highest since 2008; Over Rs 11K cr collected in first eight months of 2017, says Chandan Kishore Kant
'Investors need to understand that these schemes may not do well in the market that is in a bull run, but quality stocks would protect the downside.'
After the rationalisation and categorisation of mutual fund schemes undertaken by the Sebi in October 2017, overnight funds have emerged as a distinct category.
A large proportion of passive funds has beaten actively managed large-cap funds with average one-year category returns for large-cap at 10.2 per cent
Investors across age groups and risk appetite can invest in these schemes.
Of the 280-odd equity schemes that have been in existence for five years or more, 190 funds or about 70 per cent of those funds have outperformed their respective benchmark indices.
In the 52 newly listed companies since 2014, fund managers have a total investment of a mere 2.5 per cent of their assets under management.
According to a report by mutual fund tracker Morningstar, India-focused offshore funds and ETFs had witnessed a cumulative net outflow of $1.8 billion during 2012 as against a net withdrawal of $5.4 billion in 2011.
Money flowing into the equity schemes of mutual funds is back at a level last seen before the 2008 financial crisis, when the stock market tanked 60 per cent.
Market regulator, the Securities and Exchange Board of India, has set out five broad categories for mutual fund schemes, including equity, debt and hybrid funds that will benefit investors, says Ashley Coutinho
ICICI Bank, HDFC Bank, Infosys, SBI and L&T among fund managers' preferred bets.
Steep volatility in the markets has made fund managers cautious, awaiting opportunities to deploy the cash.
'The good news is that money continues to flow into India-focussed offshore funds.'
While the number of international MF schemes is increasing, so is the confusion for investors.
Despite recent setback, these remain the most appropriate tool for international diversification
Only tactical investors lose money in a downturn due to their short investment horizon
They help diversify portfolio and are less risky.
Only if you are a conservative investor satisfied with index returns; but over long term actively managed funds give better returns in Indian markets
Such schemes try to exploit an anomaly in taxation, but aren't in violation of laws, experts say.
The move comes within months of a crisis at JPMorgan Asset Management Company.
Higher growth justifies current run-up, say experts.
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