Equity MFs log Rs 10,147 cr outflow in Dec, industry asset base surpasses `31L cr mark

New Delhi: Equity mutual funds witnessed a massive outflow of Rs 10,147 crore in December, making it the sixth consecutive monthly withdrawal, even as the industry's asset base surged to an all-time high of over Rs 31 lakh crore.

However, investors put in Rs 13,863 crore in debt mutual funds last month as compared to Rs 44,984 crore in November, data from the Association of Mutual Funds in India (Amfi) showed on Friday.

Overall, the mutual fund industry witnessed a net inflow of Rs 2,968 crore across all the segments during the period under review, much lower than Rs 27,194 crore inflow seen in November. The assets under management (AUM) of the mutual fund industry rose to an all-time high of Rs 31.02 lakh crore in December-end from Rs 30 lakh crore in November-end on inflow from debt funds.

"The industry AUM at an all-time high, increase in retail folios and also SIP folios is reflective of investor confidence in mutual fund asset class," Amfi CEO N S Venkatesh said.

As per the data, outflow from equity and equity-linked open ended schemes was at Rs 10,147 crore in December as compared to Rs 12,917 crore in November.

The equity schemes had witnessed an outflow of Rs 2,725 crore in October, Rs 734 crore in September, Rs 4,000 crore in August and Rs 2,480 crore in July, which was their first withdrawal in over four years.

Prior to this, such schemes had attracted Rs 240.55 crore in June. Since July, equity oriented mutual funds have witnessed a net outflow of over Rs 33,000 crore.

Incessant selling by mutual funds due to redemption by investors comes on the back of good performance by stock market over the last nine months since the lows of March 2020.

With Nifty 50 index delivering returns of 3.5 per cent in October, 11.4 per cent in November and 7.8 per cent in December, mutual fund investors are indulging in continuous profit booking to shore up their substantial gains, said Gopal Kavalireddi, Head of Research at FYERS. Himanshu Srivastava, Associate Director Manager Research of Morningstar India, said, "The continuation of net outflows from equity funds could be attributed to profit booking/portfolio rebalancing as markets continue to touch new highs.

"Infact, the net outflow number would have been higher had it not been for the new fund offers (NFOs) across multiple equity categories which collected Rs 7,600 crore," Srivastava added. Barring dividend yield and thematic funds, all the equity schemes saw outflows last month. Large cap and multi cap categories were the worst hit during the month, together witnessing a net outflow of Rs 7,417 crore in December.

Similarly, hybrid funds saw an outflow of Rs 5,932 crore during December. The outflow for the category stood at Rs 5,249 crore in November.