InvestorQ : How have been the mutual fund flows for the month of July 2022?
Rutuja Nigam made post

How have been the mutual fund flows for the month of July 2022?

2 months ago

The flows were positive overall with more than Rs23,000 crore coming into mutual funds in the month of July 2022. The overall AUM (assets under management) of Indian mutual funds bounced back sharply to Rs37.7 trillion as the sharp spike in the stock market indices in the month of July boosted valuations. Equity-oriented mutual funds got net inflows of Rs8,898 crore in July 2022. However, this is the lowest figure since October 2021. The good news is the the SIP flows or systematic investment plans were robust at Rs12,140 crore.

In a way, the stock markets staged a comeback in July 2022. However, uncertain market conditions and the weight of global headwinds could have weighed on sentiment in a big way, which explains the tepid flows into equity funds. It is also observed that a number of investors used the sharp bounce in the equity markets to cash out. The flows into debt funds were tepid in the month of July as there were fears that higher bond yields could negatively impact the valuations of long dated bond funds.

Inflows into SIPs remained strong at Rs12,140 crore, and this figure has almost flat in the last 3 months, despite the challenging macro conditions. SIP AUM crossed the Rs6 trillion mark during the month for the first time ever. Equity AUM rose to Rs14.15 trillion; largely on the back of a spike in the indeces. Debt AUM remained flat month-on-month at Rs12.6 trillion, although the flows were marginally positive, but largely driven by flows into overnight funds, with most of the longer ended and even floater categories seeing outflows.

Low-cost investment avenues like exchange-traded funds and index funds, which are regarded as the passive funds, logged net inflows of over Rs14,000 crore and remained the bedrock of flows into mutual funds. After a hiatus of 2 months, the NFOs were back in action and since most of the NFOs were still open at the cloes of the month, a clearer picture will only emerge in August. In fact the NFOs were largely concentrated on the passive ETFs, since the product level do not apply to this category of funds.