Mutual Funds: In its recent report, domestic brokerage Motilal Oswal Financial Services said that overall equity flow continues to be strong driven by Systematic Investment Plans (SIPs). However, recently there has been a slowdown in gross flows owing to Shraddha Paksha, and an increase in redemptions as consumption demand is improving, it added.
Equity segment flows healthy driven by strong SIP momentum
The brokerage report states that from October 23, there has been some pressure on gross flows owing to the Shraddha Paksha period. This is expected to revive post-Diwali.
“SIP momentum, however, has continued to remain strong and the penetration is intensifying in lower-tier cities. Cancellation and bounce rates have seen a marked reduction over the past few months. SIP ticket sizes have also been moving higher in the smaller towns and cities. Almost 95% of SIPs in terms of count are in the equity segment,” the report stated.
Within the equity segment, demand for small-cap funds has been the strongest.
Among the major AMCs, Nippon AMC and HDFC AMC continue to attract large inflows aided by the sustained healthy fund performance, the brokerage report stated.
Despite the decline, inflow through SIPs (Systematic Investment Plans) hit a fresh all-time high of ₹16,042 crore last month, according to the data from the Association of Mutual Funds in India (AMFI) released on 11 October. In the first six months of the current financial year, the total SIP amount stood at ₹90,304 crore, clocking a healthy run rate of ₹15,050 crore.
Debt fund sees competition from FDs
“On the debt side, the momentum remains weak as large institutional investors are waiting on the sidelines given the geopolitical tensions across the world. FD is emerging to be a stronger product vs. longer-duration MF schemes. However, demand remains strong for the shorter duration (< 1 year) schemes,” the brokerage said in its report.
As per AMFI data, debt-oriented schemes witnessed net outflows of ₹1.01 lakh crore in September, making it the second consecutive month of decline.
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Updated: 23 Oct 2023, 02:55 PM IST