Inflows in equity mutual funds dropped to a 10-month low level at Rs 6,120 crore in August on account of investors taking a cautious approach and temporarily shifting money from equity to debt because of the rising interest rate scenario.
This was the 18th straight month of inflows in equity mutual funds (MFs) but the pace of inflow has been declining over the past few months.
The net inflows in August were lower compared with Rs 8,898 crore in July, Rs 15,495 crore in June, Rs 18,529 crore in May and Rs 15,890 crore in April, according to data released by the Association of Mutual Funds in India.
August saw the lowest level of inflow since October 2021, when equity mutual funds had attracted Rs 5,215 crore.
Equity schemes have been witnessing net inflow since March 2021. These schemes saw outflows for eight months from July 2020 to February 2021, losing Rs 46,791 crore.
Priya Agrawal, Money Coach, LXME, attributed the lower inflow to investors taking a cautious approach this month and money is temporarily shifting from equity to debt considering the rising interest rate scenario.
“Equity MF inflows, while positive, have moderated in recent months. There is usually a tendency amongst domestic investors to book profits near all-time highs, which is also getting reflected in the lower quantum of inflows,” Arun Kumar, head of research, FundsIndia, said.