Record Rs 25,789 crore outflows from equity MFs in December quarter

The benchmark indices are scaling lifetime highs with the 30-scrip Sensex posting its best quarterly gain of 25.4 per cent since September 2009. Taking an advantage, investors are taking money off the table which resulted into record outflows of Rs 25,789 crore from equity mutual funds during October-December period. This is the second consecutive quarterly outflow since March 2014. The September quarter had seen outflows to the tune of Rs 7,214 crore. According to data released by the Association of Mutual Funds in India, equity and equity-linked mutual funds continued to witness outflows for the sixth straight month, albeit lower than the previous month -- investors pulled out a net Rs 10,147 crore in December compared to highest ever monthly outflow of Rs 12,917 crore in November.

Notably, these outflows did not imbalance the inflows in 2020 as Rs 42,106 crore of cumulative inflows between January and June 2020 ensured net inflows of Rs 9,102.2 crore in 2020, albeit significantly lower than Rs 65,711 crore inflows in 2019.

All equity MF categories except dividend yield and sectoral funds witnessed outflows during December with the largecap fund category (-Rs 3,876.4 crore) seeing the highest outflows, followed by multicap (-Rs 3,540. 8 crore) and contra fund (-Rs 1,640.9 crore) categories.

Contributions through systematic investment plans or SIPs rose above the Rs 8,000-crore mark, to Rs 8,418.1 crore, after May 2020.

At the same time, mutual fund industry's assets under management (AUM) improved 3.8 per cent over the preceding month to Rs 30.96 lakh crore in December while equity AUM increased 6.8 per cent, month-on-month.

"MF industry AUMs at an all-time high, increase in retail Folios and also SIP folios, is reflective of investor confidence in mutual fund asset class. While net-inflows in equity funds and hybrid are indeed negative, on the back of profit-led redemptions, the gross inflows are a healthy Rs 36,000 crore in these two categories," says N S Venkatesh, Chief Executive, AMFI. 

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