September net equity inflow at Rs 13,857 crore; holds positive territory for 31st month in a row

During September, BSE Sensex net gained 1.50 percent, while NSE Nifty was up 2 percent.

Inflows into open-ended equity mutual funds came in at Rs 13,857 crore in September, against Rs 20,161 crore inflows (MoM), data from the Association of Mutual Funds in India (AMFI) released on October 11 showed.

Net inflows into equity funds have now remained in the positive territory for the 31st month in a row starting with March 2021.

The inflows have come amid volatile equity markets during September. During the month, BSE Sensex net gained 1.50 percent, while NSE Nifty was up 2 percent.

Also Read | Equity mutual fund inflows plunge 30% in September

Hybrid fund inflow for the month of September sees a rise at Rs 18,650 crore against inflows of Rs 17,082 crore (MoM).

Liquid fund yet again saw an outflow of Rs 74,177 crore against the outflow of Rs 26,824 crore in August. Total Assets Under Management (AUM) stood at Rs 46.58 lakh crore against Rs 46.63 lakh crore in August. ELSS outflow widened at Rs 141 crore against Rs 27 crore outflows on a monthly basis.

Smallcap funds are still getting inflows, Rs 2,678 crore (against Rs 4,265 crore in August). However, investors are avoiding largecap funds as outflows stood at Rs 111 crore, though it narrowed down compared to outflows of Rs 349 crore in August.

Notably, the corporate bond fund saw an outflow of Rs 2,460 crore against inflows of Rs Rs 1,755 crore in the month of August.

Equity mutual funds had witnessed a 165 percent rise in inflows to Rs 20,245 crore in August driven by heavy demand in small-cap and sectoral funds.

Commenting on the large cap and mid-cap data, Vinit Bolinjkar Head of Research Ventura Securities said, "Valuations of the small and mid-cap stocks were already stretched, we are seeing a slight slowdown in investments in the small and mid-caps. Earlier, there was a switch from large caps to small and mid-caps due to underperformance, which has also stopped. From now on, the large-cap outperformance should continue, while the mid-cap and small-cap stocks should very selectively be sustained"

AK Prabhakar, head of research, IDBI Capital said, "Valuation-wise, largecaps look more attractive than midcaps. Selective stocks in the midcap segment are trading in the range of 100-200 times (x) of PE versus historical averages, while several stocks from the largecap space have not performed like chemicals, life insurance, auto and auto ancillaries."

During August, large-cap funds had continued to see outflows. The selling in large-cap funds came amid fall in benchmark indices during August. On the other hand, investors continued to hold their interest in small-cap funds, maintaining the run rate above the Rs 4,000 crore mark for the third month in a row in August.

On the fixed-income side, after witnessing net inflow of Rs 61,400 crore in July, debt-oriented schemes witnessed net outflows to the tune of Rs 25,873 crore in August.