MUMBAI: Flows into equity and balanced fund schemes slowed down in June compared to the previous two months as the decline in the stock market deterred investors from putting fresh lumpsum money into these products. Equity schemes saw inflows of Rs 8794 crore in June compared to Rs 10,724 crore and Rs 10,444 crore in April and May respectively. Inflows into balanced funds in June fell to Rs 1782 crore compared to Rs 3500 crore and Rs 2666 crore respectively.
“The slowdown is due to the ongoing corrective mood in the markets where several mid and small cap stocks have taken a huge beating,” says A Balasubramaniam, Chief Executive Officer, Aditya Birla SL Mutual Fund.
Worries about a weakening macro economy, rising oil prices and interest rates, state and general elections over the next one year have made investors turn cautious on equities.
The industry saw net inflows of Rs 46,475 crore during the month. Among fixed income funds, money continued to flow out from income funds, as bond yields continued to rise and investors moved to short term funds and fixed maturity plans. Fund industry officials said the firming up of interest rates has prompted investors to opt for shorter-term debt products. The liquid fund category added Rs 52,104 crore, taking the industrys assets under management for June to Rs 22.86 lakh crore.
The industrys quarterly average assets under management stand at Rs 23.40 lakh crore, a growth of 20% over the last one year,”says NS Venkatesh, CEO, AMFI. Venkatesh expects, the industry to see strong inflows, from retail investors through SIPs despite the volatility in the markets.