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    Why are equity inflows going down? Check top performing mutual funds here

    Why are equity inflows going down? Check top performing mutual funds here

    Why are equity inflows going down? Check top performing mutual funds here
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    By Anshul   IST (Updated)


    What's leading to the drop in equity mutual funds inflows and rise in that of debt inflows? Reasons explained here

    Equity mutual funds have shown a decrease in the net inflow at Rs 5,942 crore in August, while debt oriented funds witnessed a significant net inflow. Within the equity segment, the flexi cap fund witnessed a decent inflow, followed by the mid cap fund and small cap fund.
    Other fund categories that witnessed positive flows include ultrashort duration, money market and short duration funds. Dynamic bond funds, corporate bond funds, long duration funds and gilt funds also witnessed inflows albeit at a lower magnitude.
    Here's a detail monthly report for the month of August 2022:
    Scheme Name No. of Schemes as on August 31, 2022No. of Folios as on August 31, 2022Net Inflow (+ve)/Outflow (-ve) for the month of August 2022 (INR in crore)
    Open ended Schemes
    Income/Debt Oriented Schemes
    Overnight Fund                   32              608,994         -16,405.13
    Liquid Fund                   37          1,752,790          50,095.82
    Ultra Short Duration Fund                   26              620,888             6,372.41
    Low Duration Fund                   22              995,936             2,964.11
    Money Market Fund                   22              417,852             5,928.78
    Short Duration Fund                   26              535,625             2,589.65
    Medium Duration Fund                   16              262,892               -101.90
    Medium to Long Duration Fund                   13              112,528                 -59.91
    Long Duration Fund                      3                26,037                   97.18
    Dynamic Bond Fund                   25              222,528                898.65
    Corporate Bond Fund                   21              629,857                672.70
    Credit Risk Fund                   15              260,902                 -88.34
    Banking and PSU Fund                   23              317,833           -1,380.22
    Gilt Fund                   22              172,746                368.68
    Gilt Fund with 10 year constant duration                      5                44,501               -502.69
    Floater Fund                   12              251,047           -2,285.51
    Sub Total                  320          7,232,956          49,164.29
    Growth/Equity Oriented Schemes
    Multi Cap Fund                   14          3,516,764                392.66
    Large Cap Fund                   31        12,832,758                   43.60
    Large & Mid Cap Fund                   27          7,258,212             1,030.97
    Mid Cap Fund                   27          9,420,335             1,479.42
    Small Cap Fund                   24          8,889,305             1,259.98
    Dividend Yield Fund                      8              588,848                 -29.96
    Value Fund/Contra Fund                   22          4,252,900                354.50
    Focused Fund                   27          5,310,404                886.16
    Sectoral/Thematic Funds                 118        12,455,739           -1,266.67
    ELSS                   39        14,294,155               -131.06
    Flexi Cap Fund                   33        12,285,444             2,099.98
    Sub Total                 370        91,104,864             6,119.58
    It can be seen that investors are now taking a cautious approach and money is temporarily shifting from equity to debt.
    But, why is it so?
    Commenting on the same, Kavitha Krishnan, Senior Analyst – Manager Research, Morningstar India said that investors have been parking their money in short term debt instruments as opposed to longer term instruments owing to multiple reasons.
    "Interest rate is on an upward trajectory. So, investors prefer to park their money in these short-term instruments considering that they are likely to earn a higher rate of interest as compared to other traditional investments like a fixed deposit," Krishnan said.
    Interest rates have been rising after Reserve Bank of India (RBI) hiked repo rates for three consecutives times.
    "Also, short term instruments offer the flexibility for an investor to be able to move into equity or invest in other instruments in a staggered manner by parking their money in liquid/short term funds. A lot of companies and investors could also be parking their money in short term funds in preparation for making the advance tax payments in September,” Krishnan added.
    And, why are equity inflows decreasing?
    According to Arun Kumar, Head of Research, FundsIndia, there is usually a psychological tendency amongst domestic investors to book profits near all-time highs (especially when the markets have corrected post hitting similar levels in recent past), which is getting reflected in the lower quantum of inflows.
    Now, let's look at some of the top performing funds and their returns:
    Scheme Name1M6M1Y3Y
    DSP Flexi Cap Fund - Direct Plan - GrowthFlexi Cap Fund
    SBI Contra Fund - Direct Plan - GrowthContra Fund4.35%19.22%18.66%32.81%
    Aditya Birla Sun Life Tax Plan - Direct Plan - GrowthELSS2.01%11.54%-2.00%13.06%
    Bank of India Tax Advantage Fund - Direct Plan - GrowthELSS5.11%13.84%1.45%28.88%
    HDFC Tax Saver Fund - Direct Plan - GrowthELSS3.83%18.33%12.27%19.17%
    IDFC Tax Advantage (ELSS) Fund - Direct Plan - GrowthELSS3.17%13.03%9.95%26.73%
    Kotak Tax Saver Fund - Direct Plan - GrowthELSS3.96%15.18%8.62%23.35%
    Mahindra Manulife ELSS Kar Bachat Yojana - Direct Plan - GrowthELSS2.70%13.48%6.43%23.89%
    Mirae Asset Tax Saver Fund - Direct Plan - GrowthELSS2.07%11.76%2.45%24.32%
    PGIM India ELSS Tax Saver Fund - Direct Plan - GrowthELSS3.41%10.83%9.51%22.97%
    Quant Tax Plan - Direct Plan - GrowthELSS7.61%22.91%19.77%44.57%
    (Source: Moneycontrol)
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