Equity inflows increase in August despite poor market conditions

The latest data from AMFI shows that inflows into equity dedicated mutual fund remains intact. For the month of August 2019, AMFI reported net inflows to the tune of Rs. 9152 crore compared to Rs. 8112 crore in the month of July 2019. Inflows increased despite the fact that the equity market in the month of August remained quite volatile and closed marginally below the opening of the month. This shows, in fact, shows that the Indian mutual fund investor has matured over the period and now understands that volatility is part and parcel of the equity markets.

Historic data shows that as market becomes volatile or goes down, MF investors exit from their investment and net inflows, thus followed the volatility in equity market indices. The above chart clearly shows how equity MF inflows took hit when markets were down earlier. On the contrary, this time, we find that the matured investors remain invested in equity funds despite huge volatility in the markets.

This is a good sign for Indian mutual fund industry and we may see the AUM quadruple in next ten years as per the vision document of AMFI.