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Equity Mutual Funds continued to show inflow in June 2021, however, the net inflow for June was comparably less than May month. With the net inflow of Rs 5,988.17 crore in June 2021 in equity mutual funds, the value of the total asset under management of the mutual fund industry reached Rs 33.66 lakh crore as of June 30!
With the inflow recorded in June month, equity mutual funds witnessed the net inflows for the fourth consecutive month. Although the net inflow witnessed was low than the may month in June, it is still a sizeable amount nonetheless in absolute terms.
Let us see the whole report in detail.
SIP Investments Saw A Good Rise!
Not only the equity mutual fund saw an inflow in June but there was also a good flow witnessed in the number of Systematic Investment Plans (SIP’s) in different mutual fund schemes. As per the source, the number of SIP’s in mutual funds went to 4.02 crores in June 2021 compared to 3.88 crores in May 2021. Also, the contribution from SIP investment to the mutual fund industry went up to Rs 9,155 crore in June 2021 from Rs 8818 crore in May.
The reason behind this: Equity mutual funds are a long-term investment and investing via SIP has numerous benefits when investing for the long-term. In addition, SIP preferred means of investments for many individual investors, as these are easy to understand and carry out.
What Experts Say About This?
The mutual fund industry is continuously witnessing a sharp rise in the number of new investors that almost doubled in the last 4 years and reached 2.39 crores, unique investors. The prominent thing noticed was that most of the new investors chose the path of SIP to take part in mutual fund investing. New SIPs registered which have seen a sharp rise, with June 2021 reporting record 21.29 lakh new SIP registrations.
The total AUM managed by SIP is at an all-time high and is contributing for a good part that is around 15% of total industry AUMs. The number of SIP accounts has also reached a peak, which is around 4 crore, which is simply presenting the trust of investors in SIP and mutual fund investments.
Inflow Continued But Comparatively Low!
Although the inflow in Equity mutual funds continued in June, the inflow was comparatively low than that witnessed in May. The equity funds got an inflow of Rs 5,988 crore in June 2021, down from Rs 10,082 crore in May. Mid-cap funds got the highest inflows of Rs 1,729 crore while categories like Equity-linked saving funds and value funds lost money with outflows of Rs 791 crore and Rs 114 crore, respectively.
Other Funds That Witnessed Inflow In June!
Inflow was also witnessed for short-term investments funds. Bond funds saw net inflows of Rs 3,566 crore in June 2021 against outflows of Rs 44,512 crore in May. Money market funds and ultra-short duration funds saw net outflows of Rs 13,987 crore and Rs 2,439 crore. Floater fund and low duration fund got net inflows of Rs 6,318 crore and Rs 6,273 crore, respectively.
Gold funds got net inflows of Rs 359 crore in June compared to Rs 287 crore in May. Fund of funds investing overseas received net inflows of Rs 791 crore in June compared to Rs 2,423 crore in previous months.
The inflows in gold schemes clarify that investors looking for diversification in their portfolios chose to invest in gold funds instead of opting for overseas equity funds.
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Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).