Inflows Into Equity Mutual Funds Fall For Fourth Straight Month

Inflows into equity mutual funds, including equity-linked savings schemes, fell to their lowest in more than two years in February.

Equity inflows declined 16.8 percent over the previous month to Rs 5,122 crore during the month, according to data released by the Association of Mutual Funds in India. That’s a fourth straight monthly decline.

Overall, the mutual fund industry witnessed a total outflow of Rs 20,083 crore compared with an inflow of Rs 65,439 crore in January.

The liquid or money-market category contributed the most to the total outflow into mutual funds. Money-market schemes are used by companies to park surplus cash for the short term. Investors withdrew Rs 24,509 crore from such schemes in February against an inflow of Rs 58,637 crore in January.

Income funds witnessed outflows after a pause of a month—investors withdrew Rs 4,214 crore in February. Such schemes are considered safer because they invest in high-dividend generating stocks, government securities, certificate of deposits, corporate bonds and money-market instruments.

Balanced fund flows turned negative for the second straight month with an outflow of Rs 1,077 crore compared with a withdrawal of Rs 952 crore in January.

Total assets under management of mutual funds fell 1 percent month-on-month to Rs 23.16 lakh crore in February. Total equity assets remained largely flat at Rs 7.73 lakh crore.

This is a developing story.