Inflows into equity mutual funds declined by 18.83 per cent to ₹24,690.33 crore in October from ₹30,421.69 crore in September, amid profit booking and investor preference for diversification.

Within equity funds, inflows into each of the large cap, mid cap and small cap funds moderated month on month, while investments into flexi cap funds surged 27 per cent to ₹8,928.71 crore from ₹7,029.26 crore in September.

“Some profit booking could have happened because we have seen the returns are stable,” said Amfi chief executive Venkat Chalasani on the net outflow from equity funds.

“For the previous few months, the Nifty has been volatile, in a range and consolidating. These markets put investors’ patience and expectations of consistent returns to the test, which is what has caused the industry to witness a slowdown in the inflows,” said Viraj Gandhi, CEO, Samco Mutual Fund.

“The flexi-cap category continues to attract steady inflows, highlighting investors’ preference for diversified strategies. Sectoral fund flows, which had seen a sharp rise earlier due to multiple NFOs, have now normalised, which is a healthy sign as investors are becoming more measured,” said Suranjana Borthakur, head of distribution and strategic alliances, Mirae Asset Investment Managers (India).

Precious metals

Gold ETF inflows moderated to ₹7,743.19 crore in October from ₹8,363.13 crore in September. Silver ETF inflows at ₹3,412 crore were also down month on month.

“The trend that we are seeing is clearly a shift in asset allocation in favour of commodities such as gold and silver. In the last two months, gold ETFs’ net sales have gone up 300 per cent to over ₹7,500 crore last month. Net sales on asset allocation funds, such as a multi-asset fund (with exposure to gold), are also witnessing sustained flows of over ₹5,000 crore, which used to be around ₹2,000 crore 6 months back,” said Akhil Chaturvedi, ED and CBO, Motilal Oswal Asset Management Company.

“Gold and silver have outperformed Indian equities over 1 year and, therefore, a shift in the allocation pattern is expected,” he said.

Debt funds rebound

Inflows into debt mutual funds rebounded during October, reaching ₹1,59,957.96 crore compared with an outflow of ₹1,01,977.26 crore in September.

“About 68 per cent of the (overall) net inflow of ₹2.15 lakh crore this month is part of overnight, liquid, ultra short duration and money market funds. We expect some of this to exit closer to the advance tax payment due date,” said Naval Kagalwala, COO and head of products at Shriram Wealth.

Specialised Investment Funds, a new category that allows an integrated investment option to high networth investors exploring equity, debt and derivative instruments, saw a strong traction with net inflows of ₹2,004.56 crore.

SIP contribution for October stood at ₹29,529.37 crore, with SIP AUM at 20.3 per cent of total assets.