Sep-21 quarter sees strong flows into equity and hybrid funds

As of the close of Sep-21 quarter, net AUM of Indian mutual funds stood at Rs36.74 trillion, a gain of 9.12% compared over Jun-21 quarter.

Oct 25, 2021 07:10 IST India Infoline News Service

The quarterly flows data for the Sep-21 quarter published by AMFI shows all-round positive inflows across fund classes. However, in terms of specific categories of flows, the equity funds, hybrid funds and even the passive fund inflows trumped the flows into debt funds. This shows a flow bias in favour of equities and alternate asset classes in Sep-21 quarter.

As of the close of Sep-21 quarter, net AUM of Indian mutual funds stood at Rs36.74 trillion, a gain of 9.12% compared over Jun-21 quarter. Average net AUM stood at Rs37.41 trillion. Nearly 70% of the equity fund AUM accretion in the quarter was triggered by the rally in the Nifty and Sensex. Here is the break-up of MF AUM at the end of Sep-21 quarter.

As of the Sep-20 quarter, the AUM of Indian mutual funds stood at Rs26.86 trillion. From that point, AUM has grown 36.8% to Rs36.74 trillion. However, this AUM accretion has been driven by the Nifty and Sensex gaining over 50% yoy.  Here is how flows into specific categories of funds panned out in the quarter.

How debt fund flows panned out in Sep-21 quarter?

Flows into Debt Funds in the Sep-21 quarter (AMFI)
Funds Mobilized Redemptions Net Flow Net AUM as of Sep-21
Rs20.91 trillion Rs20.80 trillion Rs0.11 trillion Rs14.15 trillion

Debt funds saw net redemptions of Rs84,202cr in Mar-21 quarter and net inflows of Rs59,957cr in Jun-21 quarter. In comparison, Sep-21 quarter saw subdued net inflows of Rs10,858cr. What were the big flow drivers? Here is a look at inflows first. Floater funds dominated inflows in the Sep-21 quarter at Rs23,286cr followed by overnight funds at Rs14,525cr. Among other categories, medium  duration funds saw net inflows of Rs3,086cr in the quarter while credit risk funds saw inflows of Rs800cr and dynamic bond funds Rs745cr. Other inflows were relatively small.

Despite overall positive inflows into debt funds, some specific categories saw outflows. For instance, Banking and PSU Funds saw outflows of (Rs4,498cr), corporate bond funds (Rs1,437cr) and short duration funds (Rs949cr). There were other sell candidates too, but the quantities were quite small.

Total AUM of all debt funds at the close of the Sep-21 quarter stood at Rs14.15 trillion with its overall share of MF AUM falling by 264 basis points over Jun-21 to 38.53%. Over the last one year, the share of debt funds in overall MF AUM has slipped by nearly 700 basis points.

How equity fund flows panned out in Sep-21 quarter?

Flows into Equity Funds in the Sep-21 quarter (AMFI)
Funds Mobilized Redemptions Net Flow Net AUM as of Sep-21
Rs112,427cr Rs72,499cr Rs39,928cr Rs12.80 trillion

Equity funds in the Sep-21 quarter saw net inflows of Rs39,928cr. What were the big contributors to this flow? Let us look at redemptions first. Net outflows were limited to just 2 categories. ELSS funds saw outflows of (Rs2,163cr) and Value funds (Rs1,193cr). These were the 2 categories that lagged in the Jun-21 quarter too.

The positive contributors to equity funds were a lot more affirmative. Flexi-Cap funds saw positive flows of Rs21,975cr largely on the back of a spate of NFOs. In addition, there were positive flows into sector funds Rs10,232cr, focused funds Rs4,197cr, mid-cap funds Rs3,001cr and large & mid-cap funds Rs1,943cr. Small cap funds also saw net inflows of Rs1,367cr in the Sep-21 quarter.

The total AUM of equity funds at the end of the Sep-21 quarter stood at Rs12.80 trillion increasing its share by 186 bps over Jun-21 quarter to 34.83%. The AUM share of equity funds has gone up sharply by 450-500 basis points over the previous year.

How hybrid fund flows panned out in Sep-21 quarter?

Flows into Hybrid Funds in the Sep-21 quarter (AMFI)
Funds Mobilized Redemptions Net Flow Net AUM as of Sep-21
Rs92,006cr Rs50,231cr Rs41,775cr Rs4.50 trillion

Hybrid funds were the big stars of Sep-21 quarter with hybrid inflows even beating equity fund inflows. This story was driven by the record collections in the SBI MF Balanced Advantage Fund NFO. Overall, Balanced Advantage Funds saw inflows of Rs24,258cr followed by arbitrage funds Rs13,708cr. Even equity savings funds saw inflows of Rs2,502cr while conservative hybrid funds saw inflows of Rs1,163cr in the Sep-21 quarter.

Total AUM of all hybrid funds at the end of Sep-21 quarter stood at Rs4.50 trillion, growing its AUM market share by 75 bps to 12.25% of total mutual fund AUM.

How passive fund flows panned out in Sep-21 quarter?
Flows into Passive Funds in the Sep-21 quarter (AMFI)
Funds Mobilized Redemptions Net Flow Net AUM as of Sep-21
Rs48,759cr Rs15,463cr Rs33,296cr Rs4.34 trillion

Passive funds had another good quarter with net inflow of Rs33,296cr, more than 50% above the Jun-21 quarter inflows. There was traction across passive categories. Index Funds/ETFs Rs6,150cr, Gold ETFs Rs408cr, Debt & other ETFs Rs22,753cr and International FOFs Rs3,986cr; dominated passive funds with robust inflows. Passive funds now contribute 11.82% of total MF AUM; 97 basis points higher than Jun-21 quarter.

What really stands out in the Sep-21 quarter flows is that, apart from traditional equity and debt fund flows, hybrids and passive funds are fast emerging as the viable third alternative for investors.


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