Moneycontrol
Jan 20, 2017 02:16 PM IST | Source: Moneycontrol.com

Retail investors poured money into equity funds in 2016

In nine out of the 11 months till November, equity schemes saw more money coming in than going out. The not so good news—investors were not as enthusiastic about equity schemes this year as they were in 2015. Inflows of Rs 44,772 crore, were almost half of the Rs 90,603 crore received in 2015


Here is the good news for the mutual fund industry. Retail investors continued to pour money into equity diversified schemes in 2016 despite the indifferent performance of benchmark indices.

In nine out of the 11 months till November, equity schemes saw more money coming in than going out. The not so good news—investors were not as enthusiastic about equity schemes this year as they were in 2015. Inflows of Rs 44,772 crore, were almost half of the Rs 90,603 crore received in 2015.


Fund managers said bouts of volatility and lacklustre returns impacted investor sentiment prompting them to pull out investments from equity schemes and shift to debt funds due to low-risk and attractive returns. Currently, mutual fund industry offers 400 equity schemes with a total asset size of Rs 4.68 lakh crore as on November 30.


Debt funds, on the other hand, on the back of robust performance attracted investors' attention. The income category saw inflows in 8 months out of 11. Investors flocked to long-duration debt funds which are likely to benefit from falling interest rates.

Asset managers feel long-duration bond funds could show good returns in the coming months, with the Reserve Bank of India likely to signal softer interest rates.

"The ten year yield is already factoring in a 50 basis point rate cut, so there could be some volatility around that. We expect debt markets to be range bound and investors would be advised to invest in a short term bond fund or in a dynamic bond fund," said Murthy Nagarajan, head-fixed income, Quantum Mutual Fund.


Balanced funds was the only category that recorded inflows on all 11 months. Gold ETFs saw inflows only in the month of October this year. The yellow metal witnessed strong volatility all through 2016 due to global events such as Brexit, US presidential election and anticipation of an interest rate hike by the US Fed.


*The data for the month of December will be available in January 2017 on AMFI website.


         Net Inflow/Outflow in MF categories month wise in 2016 (Rs in Crore)


Fund Categories

     Jan

      Feb

     Mar

    Apr

    May

    June

    July

    Aug

   Sep

   Oct

    Nov

Income

15,014

-925

-14,048

31,448

5,688

1,697

43,913

28,457

-11,024

52,125

18,306

Equity

2,128

1,634

-3,206

4,042

4,260

-45

2,221

6,103

3,248

8,688

8,068

Balanced

880

941

78

366

974

2,402

2,079

2,732

3,275

3,385

3,632

Liquid

2,455

20,039

-58,605

1,34,311

-69,399

-26,847

54,212

-13,182

19,630

-34,813

1,350

Gilt

23

-572

-1,073

-372

-837

7

-171

31

-961

1,353

899

ELSS-Equity

786

888

1,836

396

461

365

285

402

495

706

1,011

Gold ETFs

-81

-142

-105

-69

-79

-80

-183

-51

-77

20

-69

Other ETFs

1,385

1,190

1,866

71

766

1,009

387

892

1,533

940

2,830


Source: AMFI






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