​Inflows to equity funds slow down, may weaken DII support to market


NEW DELHI: Domestic equity-oriented mutual funds, which played saviour for the equity market all through 2015, saw a steep 5 per cent drop in assets under management (AUM) in January. This was the steepest fall in the past 35 months.
Data available with Amfi suggests that AUM of mutual fund industry, as a whole, declined by Rs 1,121 crore to Rs 12.73 lakh crore in January from 12.74 lakh crore in December.

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Flow of assets slowed down also to equity schemes, which saw a nearly 5.3 per cent or Rs 21,312 crore drop in AUM from Rs 4.05 lakh crore at the end of December, 2015 to Rs 3.84 lakh crore at the end of this past January. This included marked-to-market losses as the benchmark indices lost 4.77 per cent during the month.

Investors pumped Rs 2,914 crore into equity mutual fund schemes during the month compared with Rs 3,644 crore in the preceding month.
All through the recent market slump, investor interest in the equity schemes remained strong as can be seen from the fact that mutual funds remained buyers despite a 4.8 per cent fall in the benchmark indices in January.
They bought Rs 7,327.80 crore worth of equities during January against Rs 11,126 crore worth of selling by foreign portfolio investors (FPIs) during this period. In the whole of calendar 2015, mutual funds invested Rs 72,198 crore into domestic equities amid strong FII outflows, which left total equity investment by overseas portfolio investors during the year at a measly Rs 17,808 crore.
BSE benchmark Sensex plunged by 1247 points to 24,871 from 26,118 during the month due to concerns over weakness in global economic growth and tepid earnings from India Inc.

“We saw selling by FIIs last year, but DIIs came and bought all the time. At current market prices, what I am seeing among my clients is that they are looking for stability in the market. A lot of money is waiting to come into the market; a serious amount of commitment is coming. Everybody wants to buy at the botto ..
Once that confidence returns, we are going to see some serious inflow from the DII side, at least from domestic HNIs,” Agrawal said.