The net inflow into the equity mutual fund schemes has hit a 24-month low with investment of just Rs. 6,158 crore in January 2019. Uncertainty on assembly election outcome front and continued volatility in stock markets are the two main factors impacting the sentiment, nonetheless it is worth mentioning that the retail contribution is kept intact in these funds.
The decline in net mutual fund inflow into equity schemes last month when compared to a year ago period is huge at 60%, as the category in the corresponding period a year ago garnered an overall inflow of Rs. 15,390 crore into equity schemes. In December also, investments into equity schemes came in higher by 6.7% at Rs. 6,606 crore.
As per the AMFI data, equity funds include both the pure equity funds and ELSS or equity-linked savings schemes. Arbitrage funds, on the other hand, saw a net outflow of Rs. 1,076 crore in January 2019, taking the overall net inflow at Rs. 3,838 crore, which is less than 33% in comparison to what the mutual fund industry collected in 2018.
Also there has been witnessed a steady increase when it comes to mutual fund redemptions. For the last month, redemptions increased to Rs. 11,397 crore from Rs. 11,234 crore in December month. The continued increase in redemptions is primarily owed to financial markets volatility last year and stringent regulations on commissions in the mutual fund industry by the SEBI.