SIPs hit all-time high, small cap funds see 37% dip in flows
NEW DELHI : Systematic investment plans (SIPs) into mutual funds hit an all-time high in September, crossing the ₹16,000-crore mark for the first time while inflows into small and midcap funds moderated amid sky-high valuations in some stocks. Net inflows into equity mutual funds dipped by 30% while debt fund outflows hit an 18 month high of ₹1.01 trillion, mutual fund body AMFI said Wednesday. SIPs stood at ₹16,042 crore in September, up from ₹15,814 crore a month ago.
Net inflows into equity funds fell 30.39% to ₹14,091.26 crore. Net inflows into small cap funds were down by 37% at ₹2,678.47 crore in September and into midcaps declined by 20% to ₹2,001 crore. Debt equity fund outflows skyrocketed to ₹1.01 trillion, compared to ₹25,873 crore in the previous month.
The dip in the net inflows in mid- and small-cap funds can be attributed to some profit booking by investors coupled with concerns regarding inflated valuations in some of these segments, said Melvyn Santarita, analyst – Manager Research, Morningstar Investment Adviser India. Debt funds saw heavy outflows, but experts say this was expected. “Outflows normally happen from debt mutual funds during half-year closing as banks have to set aside capital against their investments.
Most banks had parked money in liquid and money market funds as the yield to maturity of liquid and money market are 25 to 50 basis points higher than lending in overnight markets. Corporates tend to withdraw due to salary and other half yearly payouts," says Murthy Nagarajan, head-fixed income, Tata Asset Management. Among equity categories, sectoral and thematic funds saw the highest inflows to the tune of ₹3,146 crore during the month.
Read more on livemint.com
