Equity MF inflows slow down despite bulls ruling the roost

Notwithstanding the heady inflows into equity mutual fund schemes, five of the 11 equity categories have registered a net outflow or lower inflow compared to last fiscal.

Interestingly, large-cap and focused funds have seen a net outflow of ₹613 crore and ₹4,060 crore in the year ended March against an inflow of ₹8,373 crore and ₹6,357 crore in FY’23, according to a FYERS research report.

Similarly, with the introduction of the new tax regime, equity linked saving schemes (ELSS) have lost their glory and inflows plunged 87 per cent to ₹1,040 crore (₹7,744 crore). The new tax regime provides for a lower tax rate but does not provide for any exemptions and deductions such as HRA, LTA, 80C, 80D and many more.

Inflow into the flexi-cap category was down nine per cent at ₹15,502 crore (₹16,961 crore) as investors preferred to book profit after the recent run-up in equity markets. In fact, Flexi-cap is the most sought-after as market regulator Sebi norms provide a free hand for the scheme fund managers to move across market cap without any restrictions.

Investment in the dividend yield category fell 11 per cent to ₹3,470 crore (₹3,892 crore) due to the lack of any new fund offer in this category.

However, inflows into equity mutual funds rose 25 per cent at ₹1.84 lakh crore (₹1.47 lakh crore) largely aided by a mad rush to invest in small and mid-cap schemes.

Investments in small and mid cap categories increased 82 per cent and 10 per cent respectively to ₹40,189 crore (₹22,104 crore) and ₹22,226 crore (₹20,206 crore). Net inflows into multi-cap fund doubled to ₹22,958 crore (₹11,420 crore)

Gopal Kavalireddi, Vice-President of Research, FYERS said investors seeking higher returns have shifted their portfolios towards mid and small cap segments of the market, rather than large-cap stocks.

While dividend yield funds, which focus on generating income, would have limited capital appreciation potential, the relevance of ELSS as a tax-saving option has decreased with the introduction of the new tax regime.

New-age investors are not just smart, but also evolving, well-tuned to the prevailing market dynamics and financial environment, he added.

Crime Today News | Markets | Commodities | Forex | Stocks

Source | Powered by Yes Mom Hosting
Crime Today News Agency

Crime Today News

Welcome to Crime Today News, your trusted source for timely and unbiased news coverage. Since our inception in 2014, we have been dedicated to delivering the latest updates to our valued readers and viewers across Telangana.

Related Posts