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Equity MF inflows drop 50 pc to Rs 12k-cr in Dec qtr on valuation, growth concerns

Feb 16, 2020, 10:40 IST
PTI
New Delhi, Feb 16 () Investors poured nearly Rs 12,000 crore into equity oriented mutual funds in the three months ended December 2019, a sharp slump of 50 per cent from the preceding quarter, on worries over stock valuations as well as stuttering economic growth.

Notably, all categories of equity funds, including large-cap, mid-cap, small-cap and dividend yield funds, saw a drop in flows compared to the preceding quarter.

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According to a Morningstar report, total flows in equity mutual funds stood at Rs 11,837 crore for the quarter ended December as against Rs 23,874 crore in the September quarter.

During April-June quarter, inflows in such schemes stood at Rs 17,500 crore.

The asset base of equity funds, on the other hand, rose by 6 per cent to Rs 7.7 lakh crore for the quarter ended December.

"Although the flows were positive, the sharp fall in equity flows could be attributed to concerns around over-valuations of some of the underlying stocks held by funds, polarised performances of some of the heavy-weighted stocks in the indexes, which camouflages the performance of the other under-performing stocks, and concerns regarding the steady fall in the GDP growth of the country that have been witnessed in the past few months," the report noted.

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Over 30 per cent of the net equity flows have been directed toward the large-cap category, as this segment has been the most resilient over the past year and delivered good returns.

However, inflows in large-cap funds plunged by 42 per cent to Rs 3,500 crore for the period under review, from Rs 6,000 crore seen in July-September.

Until this quarter, large-cap equities had continued to see steady rise in flows as investors continued to align their investments to these funds relative to mid-cap and small-cap counterparts, which saw significant corrections in some of the underlying stocks.

Mid-cap funds saw infusion to the tune of Rs 2,688 crore in the period under review, from Rs 3,738 crore in the preceding three months, translating into a decline of 28 per cent.

The flows in the small-cap category halved to Rs 1,360 crore, from Rs 3,038 crore in the September quarter.

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Overall, mutual fund flows have been growing consecutively for the past four quarters. Such funds witnessed a net infusion of Rs 1,28,463 crore in the third quarter of the ongoing financial year 2019-20, compared to Rs 46,578 crore in the preceding three months. SP ABM

(This story has not been edited by www.businessinsider.in and is auto–generated from a syndicated feed we subscribe to.)
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