Equity mutual fund inflows more than triple in Dec - industry data

A man looks at a screen displaying news of markets update inside the Bombay Stock Exchange (BSE) building in Mumbai

By Bharath Rajeswaran

BENGALURU (Reuters) - Inflows into Indian equity mutual funds more than tripled to 73.03 billion rupees ($888.74 million) in December 2022 from the previous month, data from the Association of Mutual Funds in India (AMFI) showed.

GRAPHIC: Net equity inflows more than triple MoM in December - https://www.reuters.com/graphics/DEC-EQUITYMF/AMFI-DECEMF/lgpdklwrkvo/chart.png

The inflows came despite the broader indexes, NSE Nifty 50 and S&P BSE Sensex, seeing a selloff to the tune of nearly 4% in December.

"The recovery in equity mutual fund inflows is a vindication that equities will be the preferred asset class for mutual fund investors," said N.S. Venkatesh, chief executive officer of AMFI.

Inflows had tanked nearly 76% in November to 22.58 billion Indian rupees, hitting a 21-month low.

Small-cap funds accounted for most of the investments at 22.45 billion rupees. Large-cap funds saw outflows falling to 0.26 billion rupees, compared to outflows of 10.39 billion rupees in the previous month.

GRAPHIC: Segment-wise trends  - https://www.reuters.com/graphics/AMFI-SEGD/SEGD-AMFI/jnvwyweqnvw/chart.png

"Domestic investors latched on to small-cap equity funds as the segment became attractive due to recent correction, from an entry point of view," said Venkatesh.

Contributions to systematic investment plans (SIPs) – where investors make periodic, equal payments into a mutual fund – rose for the fifth consecutive month to a record 135.73 billion Indian rupees ($1.65 billion) in December, data showed.

GRAPHIC: SIP contribution rises to record high for fifth month - https://www.reuters.com/graphics/SIP-CONTD/CONTD-SIP/myvmogndxvr/chart.png

Liquid funds - funds that mature in 91 days - saw outflows of 138.52 billion rupees, according to AMFI.

GRAPHIC: Liquid funds witness outflows in December - https://www.reuters.com/graphics/LIQUID-FUNDD/FUNDD-LIQUID/lgvdklkmkpo/chart.png

"It's natural to see outflows from liquid funds at the end of a year, as corporates use the funds to pay advance tax for the year," Venkatesh said.

GRAPHIC: Credit risk funds see outflows for second month in a row - https://www.reuters.com/graphics/CREDIT-RISKD/RISKD-CREDIT/xmpjklkgjvr/chart.png

The mutual fund industry logged a total net inflow of 44.91 billion rupees, down 66% from 132.64 billion rupees in November, dragged largely by liquid fund outflows, AMFI data showed.

The average assets under management rose nearly 1% to 40.8 trillion rupees from 40.5 trillion rupees in November.

GRAPHIC: Net flows into Mutual Funds fall to three-month low - https://www.reuters.com/graphics/NET-MFFLOWD/MFFLOWD-NET/zdpxdrdywpx/chart.png

($1 = 82.1725 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman)