Hybrid funds, which invest in equities and debt securities, were sold aggressively by fund houses after demonetisation
The net inflow of hybrid funds which invests in equity shares and debt instruments fell to a 28-month low of Rs 300 crore in July, according to the data on Association of Mutual Funds in India (AMFI).
Hybrid funds were promoted and sold aggressively by fund houses after demonetisation was announced on November 9, 2016.
Mutual Fund experts feel that one-year return of equity-oriented hybrid funds has come down 4-5 percent due to volatile stock markets in the past few months leading to a sharp fall in inflows in the underlined schemes last month.
According to the AMFI data, the net inflow in hybrid funds averaged around Rs 700 crore per month in calendar 2017 which is almost 3.5 times higher than in 2016.
However, this calendar year the average net inflow in hybrid schemes has dropped. During January-June of 2018, the net inflow in hybrid funds averaged Rs 230 crore per month.
Last month, mutual funds also slowed down their purchases from the stock market.
In July, equity fund managers picked up shares worth Rs 4,000 crore, which was the lowest since February 2017, according to data compiled by the Securities and Exchange Board of India.
Also, net investments were 57 percent lower than June's tally of Rs 9,200 crore and 67 percent lower than the one-year monthly average of Rs 12,200 crore.
Fund officials attributed the drop in equity investments to slowing inflows into equity schemes. They also said high net worth individuals or HNIs, who are not used to higher market volatility, redeemed their investments.
Among other developments last week, HDFC AMC debuted on the exchanges.
HDFC Asset Management Co’s IPO which was subscribed 83.06 times the shares on offer was not costly. It was issued at a marginal premium to Reliance Nippon Asset Management Co, the other asset manager listed on the bourses. It is only after the opening day jump of 65 percent, HDFC AMC’s valuation widened over its rival.
The stellar debut on the bourses of HDFC AMC made the top employees at the fund house richer.
The employee stock options (ESOPs) allotted to Managing Director Milind Barve, who owns 11.7 lakh shares is now worth Rs 212.35 crore. Ace fund manager Prashant Jain, who owns 9,28,000 shares, has his stake amounting to Rs 168.43 crore.
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