Multi cap mutual fund collection dipped by 90% in January; Here is why

After collecting big inflows from New Fund Offers (NFOs) in December, multi cap mutual fund schemes have fallen out of favour. According to monthly data released by Association
of Mutual Funds in India (AMFI), the net inflow in multi cap funds in January declined to Rs 891 crore from the high of Rs 10,516 crore in the month of December. Given the fall, inflows in equity oriented fund also declined by 40 per cent in January to Rs 14,887
crore against Rs 25,076 crore collected in December. Debt oriented schemes collected Rs 5,087.61 crore against outflow of Rs 49,154 crore in December.

In the month of December inflows in multi cap schemes was largely due to new funds launched in the same month. Three NFOs from the category - Axis Multi Cap Fund, HDFC Multi
Cap Fund and IDFC Multi Cap, had collected big inflows.

Multi cap funds invest in stocks across market capitalisation comprising large-cap, mid-cap and small-cap stocks. The category has offered an average return of 30 per cent
in one year compared to 24 per cent average return over the period of 3 years.

N S Venkatesh, Chief Executive, AMFI said, "Retail Mutual Fund investor confidence in the India Growth story, as reflected through continued all time higher quantum of monthly
SIP flows and with economy expected to rise at projected 9.2 per cent, has overshadowed the uncertainties arising out of external factors like Fed Rate hike or FII outflows. Mutual Fund asset class has been established as the preferred investment avenue for
long term goals-based savings. Retail Investors adopt rotational investment strategy in the event of rate hike and shift their savings to the Hybrid category."

Monthly contributions in Systematic Investment Plans (SIP) increased to Rs 11,516 crore in January from Rs 11,305 crore in December. The total assets under management (AUM)
in SIP stood at Rs 5,76 lakh crore in January against 5.65 lakh crore in December. 

“Budget-led Capex spending leading to overall economic growth, rising job creation avenues, healthier corporate earnings growth will spur further higher quantum of savings
into Mutual Fund Industry,” Venkatesh added.

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