Investors Continued to show their faith in large cap funds

The frontline equity indices in India are currently trading at their lifetime highs. However, the general enthusiasm that follows among investors after such a rise in the market is lacking, which is reflected in the monthly inflows data to mutual funds, released by the Association of Mutual Funds in India. According to the data, the net inflows to equity have dipped below Rs. 1,000 crores for the first time in the last several years. Net inflow in November 2019, has been at Rs. 933 crores against Rs. 6,015 crores in October 2019, showing a massive drop of 85 per cent.

The decline in the number is attributed to outflows in various categories, such as Value Fund/Contra Fund and Sectoral/Thematic Funds, that witnessed an outflow of Rs. 955 crores and Rs. 636 crores, respectively. The other major category that saw an outflow is the large and mid cap fund, at Rs. 252 crores.

Nevertheless, large cap dedicated funds saw best inflows and were to the tune of Rs. 1,196 crores, a marginal increased from the previous month of Rs. 1,182 crores. Mid cap fund and small cap fund saw a net inflow of Rs. 801 crores and 262 crores, respectively. Overall, the pure equity MF asset under management (AUM) saw an increase of one per cent on a sequential basis to Rs. 762,612 crores.

The AUM of Indian domestic MF industry crossed Rs 27 lakh crores as on November 30, 2019, and was up by 2.5 every month. This increase was primarily led by large inflows in Income/Debt Oriented Schemes. They have witnessed net inflows of Rs. 51 thousand crores in November 2019.