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 |
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
