Equity MF inflows hit 27-month high in December, cross Rs 1,000 crore

After a long time, the domestic mutual fund houses have got something to cheer about.
Net inflows into equity funds in December touched a 27-month high at Rs 1,059 crore on back of strong inflows into new fund offers (NFOs) and sales of existing schemes.

What’s more, the net inflows into equity funds have now been in positive territory for two consecutive months -- a rare instance in recent times and first since October 2011.

According to data released by Association of Mutual Funds in India (Amfi), December saw four NFOs collectively raising Rs 849 crore -- second-best month (after November that saw Rs 871 crore inflows) in nearly three-and-a-half years as buoyant equity markets along with strong push from distributors prompted retail investors to return to equity funds in a big way after a long time.

Also, the existing scheme sales too touched an 11-month high, which, in turn, helped the total gross inflows to touch 28-month high.

Sales under existing equity MF schemes stood at Rs 4,452 crore, highest since January 2013, when it stood at Rs 5,222 crore. This, in turn, aided gross total inflows in equity schemes to clock Rs 5,301 crore —highest since August 2011 (Rs 5,625 crore).

The only worrying part for industry now is that redemptions have not yet completely abated.
December saw Rs 4,242 crore of gross outflows — in line with last 12 months average of Rs 4,235 crore.

This redemption pressure forced the mutual fund managers to sell equities worth Rs 428.5 crore last month.