Mumbai: November was a mixed month for mutual funds, with inflows into equity funds slowing even as liquid funds saw a revival in interest after the NBFC crisis showed signs of easing.During the month, overall assets surged by Rs 1.42 lakh crore to touch Rs 24.03 lakh crore, buoyed by strong inflows of Rs 1.36 lakh crore into liquid and money market funds.However, inflows into equity oriented mutual funds, which include ELSS and balanced funds, stood at Rs 8,629 crore the lowest in this calendar year.
In October, investors had put in Rs 13,141 crore and in January inflows from these funds were at Rs 23,005 crore.The Diwali season, adjustments to the new brokerage structureand caution from large investors ahead of the state election results led to lower inflows into equity-oriented mutual funds, said Vishal Kapoor, chief executive officer, IDFC Mutual Fund.Sebi banned upfront brokerage payments in mutual funds effective October 22.
Bank distributors that had worked on upfront payment of commissions reworked their commission structure with fund houses, and this took time to be implemented across the branches, affecting sales.However, despite the dip in flows, investors continued to pour money into systematic investment plans (SIPs), through which inflows in November stood at Rs 7,985 crore, the same level as the previous month.
Investors have added Rs 80,645 crore through SIPs in the first 11 months of this calendar year.Balanced funds, which invest in a mix of debt and equity, saw inflows dip to Rs 215 crore, the slowest in the past one year.
While interest rates rose, investors have reallocated money from balanced funds to other category of funds, said NS Venkatesh, CEO, AMFI.With the NBFC crisis easing, investor confidence in debt funds is returning.
This is expected to gain momentum after the central bank policy that appears to indicate no immediate increase in rates.With the NBFC scene clearing, investor confidence has increased in debt funds, and some banks and corporates have started coming back to liquid funds, said Swarup Mohanty, CEO, Mirae Asset Mutual Fund.