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According to the recent report by the Association of Mutual Funds in India (AMFI), the investment space witnessed a significant decline of 28% in equity mutual fund inflows with the net equity infusion standing at Rs.6,489 crore in September.
The month also registered its lowest level of inflows in the last four months. AMFI’s report emphasised on the fact that the decline in inflows was noticed soon after investors began to book profits via redemption following the corporate tax reduction.
For the month of August, the net inflow in equity mutual funds was recorded at Rs.9,090 crore. On the same lines, July recorded an inflow of Rs.8,093 crore, June an inflow Rs.7,585 crore, and May a net inflow of Rs.4,968 crore.
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However, September witnessed an increase in the asset base from Rs.7.16 lakh crore to Rs.7.57 lakh crore despite the decline in equity mutual fund net inflows. Thanks to the significant redemption in debt-oriented schemes, the month recorded a redemption of Rs.1.52 lakh crore in mutual fund schemes. However, liquid funds also witnessed an outflow of Rs.1.41 lakh crore during the same period.
According to AMFI’s CEO, S Venkatesh, the significant increase in redemptions of liquid funds is reasonable as investors generally initiate redemptions towards the end of a quarter for advance tax purposes.
For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in.
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