Equity MF inflows in June surge over 2x MoM; smallcap funds top the list

In May, the net inflows into open-ended equity funds were Rs 3,240 crore. The net inflows into equity funds in June are the highest since March.

The assets under management (AUM) of open-ended equity funds stood at Rs 17.43 lakh crore, up over 5% month-on-month.

Within equity funds, smallcap funds saw the highest inflows during the month at Rs 5,472 crore. For the third straight month, the inflows into smallcap funds have been the highest.

In the June quarter, inflows into smallcap funds were a whopping Rs 10,937 crore, up nearly 58% from the March quarter.

Meanwhile, largecap funds saw net outflows for the second straight month in June. The net outflows were to the tune of Rs 2,050 crore, higher than the outflows of Rs 1,362 crore seen in May.

When asked if the outflows in largecap funds hint at overheating in the market, N S Venkatesh, chief executive at AMFI, said, “We don’t see any overheating in the market. It’s only a relative positioning that we have seen. Probably, they think the rally will come in more in the midcap and smallcaps. Therefore, they are likely booking profits in largecap funds.” Venkatesh, however, remains positive on the overall inflows into equity funds in the coming months.

Meanwhile, inflows through the systematic investment plan route slowed down a bit in June. The total inflows were Rs 14,734 crore last month, compared to Rs 14,749 crore in May.

However, more than 15 lakh SIP accounts were discontinued in June, Venkatesh said in a conference call.

“Some profit booking at higher levels to maintain asset allocation is not ruled out, but investors continue to keep investing through SIPs and STPs. Disciplined asset allocation is the mantra for long-term wealth creation,” said Manish Mehta, national head and sales, marketing, and digital business, Kotak Mahindra AMC.

In June, open-ended debt funds saw outflows to the tune of Rs 14,136 crore, after seeing strong inflows of nearly Rs 46,000 crore in May.

The AUM of open-ended debt funds stood at Rs 13.47 lakh crore as of June, almost flat month-on-month.

As a result, the mutual industry saw overall net outflows of Rs 2,022 crore in June. The MF industry AUM stood at Rs 44.39 lakh crore, up about 3% from May.

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