How have mutual fund flows been during the month of September 2020?

Here is what you need to know about the mutual fund flows into Indian mutual funds in the month of September 2020.

· It was the third month in succession that we got to see equity funds showing outflows. However, they were lower at just Rs.734 crore in September 2020.

· It may be recollected that in August and July 2020, the equity fund outflows were much higher at Rs.4000 crore and Rs.2480 crore respectively.

· There was a lot more aggressive pullout from debt funds at Rs.51,900 crore which can be largely attributed quarter end liquidity management by corporate investors.

· At an overall level, considering all the fund types, net outflow was to the tune of Rs. 52,000 crore in September 2020.

· In terms of trends, equity focused and equity sectoral funds saw inflows while other categories saw outflows. Not surprisingly, multi-cap funds were worst hit.

· As was expected, the outflow pressure in debt funds came from short duration funds like liquid funds and money market funds.

· Credit fund outflows continued in Sep-20 but have largely tapered compared to the intensity of April as there has been a shift to quality.

· The other big trend is that the shift to low cost passive funds like index ETFs and gold ETFs appears to be getting sharper as markets get more uncertain.