Gross Inflows Into Equities At 46-month Low

After rising 14.1% in the previous month, equity assets under management (incluing ELSS) of domestic mutual funds declined 1.4% month-on-month to Rs 6.9 trillion in May'20 owing to bleak market sentiment.

"Redemptions declined 7.6% month-on-month to Rs 81 billion, but an even higher fall in equity scheme sales (-11.6% month-on-month to Rs 137 billion - the lowest in 46 months) led to a decline in net inflows from Rs 67 billion in Apr'20 to Rs 56 billion in May'20 - the lowest in the last 5 months," broking firm Motilal Oswal said in a report.

"MF industry's assets under management increased 2.6% month-on-month (Rs 6 trillion) to Rs 24.5 trillion in May'20, primarily led by liquid funds (Rs 693 billion) and arbitrage funds (Rs 106 billion). Defensives' weight increased 220 basis points month-on-month to hit an all-time high of 35.5%.

Consumer's weight increased 100 basis points, month-n-month to 9.8% after moderating in the previous month. The sector has climbed back to the second position in the allocation of mutual funds. Telecom's weight increased for the seventh successive month (+80 basis points month-on-month, +220 basis points YoY) to hit an all-time high of 3.9%. Private Bank's weight hit 20-month low to 16.7% (-130bp MoM, -300bp YoY)," the report observed.