Investor flow to equity mutual fund schemes drops 16.3% in June, shows AMFI data

Equity mutual fund schemes saw a 16.3 percent decline in net investor flows in June to Rs 15,497 crore as volatility in stock markets hammered market sentiment, according to monthly data from the Association of Mutual Funds in India (AMFI).

Debt schemes saw net outflows to the tune of Rs 92,000 crore. This was due to a combination of quarter-end withdrawals by institutional and corporate investors for advance tax payments, and mark-to-market impact on debt schemes from rising interest rates.

“Institutional investors tend to be more sensitive to interest rate movements. They would typically be in a wait-and-watch mode and would see where interest rate stabilises,” said NS Venkatesh, chief executive of AMFI.

The number of new SIP accounts opened stood at 17.92 lakh. The number has been falling month-on-month from April. Venkatesh attributed this to investors taking a cautious stand because of the high volatility in the market.

The SIP contribution dipped marginally over the last month to Rs 12,275 crore in June.

Within the hybrid category, arbitrage funds saw net outflows of Rs 5,593 crore. According to industry experts, this is to do with shrinking spreads of the arbitrage funds.

For the MF industry, the assets under management (AUM) was down by 4.2 percent, compared to previous month, at Rs 35.64 lakh crore as of June 30.

Venkatesh also confirmed that the industry had complied with Sebi's requirement on putting in place a new system pertaining to pool accounts, which should now lead to NFOs getting launched again.