Net inflows into equity MFs hit four-year low

Equity mutual funds witnessed the lowest net inflows in 51 months in June, industry data showed on Wednesday, as jittery investors paused investments, while others cashed out in a rising market.

Net inflows, including into ELSS, crashed 95.75% from ₹5,666.34 crore in May to ₹240.55 crore in June, the lowest since March 2016, Association of Mutual Funds in India (AMFI) data showed. The figure is 96.89% below last June’s ₹7,741.04 crore inflows.

Net inflows into equity-oriented funds were substantially lower in June, said Himanshu Srivastava, associate director - manager research, Morningstar India. “This was largely on the back of net outflows from multicap and large-cap funds. This could be attributed to profit-booking by investors given the surge in the markets in recent times,” Srivastava added. The latest figures could be a one-month blip, he added.

Multicap and largecap funds saw net outflows of ₹777.60 crore and ₹212.78 crore respectively in June, while midcap and smallcap funds saw net inflows of ₹36.70 crore and ₹249.20 crore.

Redemptions in equity schemes almost doubled to ₹13,520.03 crore in June from ₹7,283.23 crore in May and ₹10,664.16 crore a year ago.

At a time of widespread pay cuts, job losses and business uncertainties, inflows through systematic investment plans (SIP) fell below ₹8,000 crore, touching ₹7,927.11 crore, in a steady decline from ₹8,123,03 crore in May and ₹8,376.11 crore in April. The June SIP figures are the lowest since November 2018.