Even as the Nifty gets a positive return for the fifth month in a row, it’s debt mutual funds that are eating the cake. Net flows into Debt funds were the highest since April 2015 with a whopping Rs. 43,000 cr. net invested!
Debt Funds: Massive Flows Inward
We saw investors buy big time into Debt funds as more than 73,000 cr. worth purchases were made in July
Redemptions were not extraordinary, at Rs. 30,694 crore.
Which means the net inflows were the highest at nearly 44,000 cr.
Equity: Great Month, But Investors Uninterested
Purchases from existing schemes for the month of July, 2016 stood at Rs. 1,530,589 crore. This revenue was generated from the existing bunch of 2,412 schemes. The revenue generated is highest for the period of review i.e. 16 months.
On the contrary, purchases from new schemes (tends to be very small) for the month of July, 2016 stood at Rs. 1,722 crore. New schemes launched were highest in the month of March, 2016 at 57 new schemes (however the revenue generated from them wasn’t that much).
Balanced Funds: Slow But Catching Up
Net Inflow/ Outflow is basically the net of purchases and redemption made.
Net Inflow for July, 2016 stood at Rs. 102,720 crore with the 4 major categories witnessing sales greater than redemption. This net flow was better than Rs. 119,060 crore for the month of July, 2015.
For the financial year 2015-16, the month with the highest inflow was Oct-15 with Rs. 134564 crore and the highest outflow was Mar-16 with Rs. 73,113 crore. Apr-16 has already thrashed the highest inflow number with Rs. 170,161 crore while we are yet to see a major outflow like the one witnessed in Mar-16.
While the above chart shows the net values, here is a more detailed chart with both the sales and redemption information. Notice how Jul-16 is the month with the highest sales but lower redemption.
The Big Data Chart: Inflows, Outflows and Net flows
AMFI currently classifies the existing/ new sales and repurchases/ redemption under 10 different categories. While not every category is a major contributor, we have taken the Top 4 categories with the majority contributions. These have been classified as Debt Funds, Equity + ELSS, Balanced Funds and the largest – Liquid/ Money Markets Funds. Other categories ignored are Infrastructure Debt Fund, Gilt, Other ETFs including Gold ETF and Fund of Funds Investing.
Point to note would be Jul-15 and Apr-16 which both reflect a similar trend as witnessed for Jul-16 i.e. inflows beating outflows across all 4 categories.
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