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However, the debt schemes posted a net outflow of Rs 92,247 crore in June, as investors took Pennies Far, further rate hikes are expected. As a result, the total assets under management (AUM) of the industry declined to ₹36.98 lakh crore from ₹37.37 lakh crore during May.
Akhil Chaturvedi, chief business officer of the company, said, “Despite continued selling by FPIs (foreign portfolio investors) and market correction during the year, net equity inflows remained resilient, reflecting a sense of maturity in the investors’ mindset.”
mutual fund.
Flow through Systematic Investment Schemes declined marginally to ₹12,276 crore from ₹12,286 crore in May.
Flexicap Fund, which lets fund managers invest across the entire spectrum of the market without any restrictions, saw the highest collection of Rs 2,512 crore in June. This was followed by thematic funds with an inflow of ₹2,151 crore and large-cap funds with an inflow of ₹1,730 crore. Low-cost passive funds, which include both equity and debt funds, saw an inflow of Rs 7,301 crore.
Dynamic Asset Allocation Fund, which invests in a mix of debt and equity based on market valuation, saw inflows of Rs 1,799 crore. Aggressive Hybrid Funds, which allocate 65-75% of their portfolio to equities, saw an inflow of Rs 1,130 crore. Arbitrage funds saw an outflow of ₹5,593 crore.
Investors pulled out of debt-oriented funds, fearing a hike in rates would result in mark-to-market (MTM) losses.
Kavita Krishnan, Senior Analyst – Manager Research, Morningstar India, said, “The uncertain macro environment, driven by the increasing rate cycle, higher commodity prices and expectations of slowing growth, has prompted investors to stay away from debt funds.”
He added that single-digit returns, rising bond yields and rising inflation have also made investors opt to redeem their investments in debt funds in favor of other investment avenues.
The outflows were largely driven by outflows of ₹20,668 crore, ₹15,782 crore, and ₹10,058 crore by overnight funds, liquid funds and ultra-short-term funds, respectively.
Corporate bond funds saw an outflow of ₹9,086 crore, followed by money market funds with an outflow of ₹8,126 crore and floater funds at ₹7,078 crore.
Gold ETFs saw an inflow of ₹135 crore as investors bought the yellow metal as a hedge against rising inflation.
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