Inflows in equity funds jump in November despite volatile markets

Despite stock market volatility in recent weeks, investors continued to invest in mutual funds. In November 2021, equity funds saw net inflows of Rs 11,614 crore, up from Rs 5,214 crore in October 2021. The overall industry’s assets now stand at Rs 37.34 trillion as on November 30, 2021.

The number of MF systematic investment plan (SIP) accounts rose to 4.78 crore as on November 30, 2021, compared to 4.64 crore as on October 31, 2021. Money continues to come through SIPs; Rs 11,004 crore a month, up from Rs 10,518 crore in the previous month.

NS Venkatesh, Chief Executive, AMFI says, “Despite rising uncertainty owing to feared third wave of the pandemic, and extreme equity market volatility, retail investors continue to benefit and hence also stick to displaying trust on the disciplined SIP mode of savings in mutual funds.”

Among equity funds, flexicap funds and large cap schemes received inflows of Rs 2,660 crore and Rs 1,624 crore, respectively. Dividend yield schemes received the least inflows of Rs 53.93 crore. ELSS funds got net inflows of Rs 174 crore, compared to net outflows of Rs 488 crore in October 2021. That is presumably due to the onset of tax-saving season where employers have started calling for investment proofs.

Hybrid funds continue their onwards march
Hybrid funds saw net inflows of Rs 9,422 crore in November 2021 compared to Rs 10,437 crore in October 2021. Balanced advantage funds – a category of mutual fund schemes that allocate money to equity and debt, attracted net inflows of Rs 6,094 crore compared to Rs 11,219 crore received in the previous months. The seemingly lower collection by BAFs in November is also due to the fact that last month NJ Balanced Advantage Fund- NJ India Mutual Fund’s maiden NFO- had collected Rs 5,216 crore.

However, investors continue to invest in these schemes with a view to seek exposure to stocks, and at the same time, contain the downside. All hybrid funds categories saw positive net inflows including arbitrage funds which received Rs 1,045 crore in November compared to Rs 2,343 crore outflows in the previous month.

Fund of fund investing overseas received Rs 338 crore in November compared to net inflows of 1,513 crore worth of inflows in October 2021.

Bond funds received net inflows of Rs 14,893 crore in November 2021 compared to Rs 12,984 crore in the previous month. Liquid funds received net inflows of Rs 53,251 crore in November compared to outflows of Rs 10,199 crore in the previous month. Medium to long-duration funds remained on the shopping list of the investors as they received inflows of Rs 900 crore compared to inflows of Rs 396 crore.

Gold ETFs also received healthy investors’ response as they saw net inflows of Rs 682 crore compared to Rs 303 crore in October 2021.

Despite a volatile stock market and uncertainty around the possible interest rate move in December monetary policy review meeting, the investors have demonstrated confidence in mutual funds.