For stock markets,August was a fairly good month but that was not the case with equity funds. Equity schemes of MFs witnessed a net outflow of Rs 142 crore in the month of August. In July,equity shemes of fund houses had got a net inflow of Rs 4,232 crore according to data available with the Association of Mutual Funds of India (AMFI).
The reason for lower inflow in equity schemes in August is being attributed to the abolishment of entry load which,according to experts,de-incentivised distributors from selling the products. Of course there are challenges in the new environment and some advisors have also registered complaints since getting a fee for their services from the customer is not an easy thing,however,in the long run this will bring transparency in the system and customers will gain confidence, said CEO of Reliance Mutual Fund Sandeep Sikka.
Sales in equity schemes of MFs fell from Rs 8,737 crore in July to Rs 4,036 crore in August.
Apart from sales in debt schemes of fund houses,sales in all other different fund categories in the month was low and experts say that a lot of money supposed to flow into mutual fund schemes went in other financial instruments like market-linked insurance products as distributors pushed them in lure of better commissions.
There has definitely been a push towards selling more insurance products and the trend might continue till the time D Swarup Committees recommendations are implemented and insurance commissions are also reduced, said executive director at Angel Broking,Hitungshu Debnath.
The growth in the average assets under management of the industry from Rs 6.89 lakh crore in July to Rs 7.49 lakh crore was mainly due to higher sales in debt schemes and an upward movement in the stock markets. Sales of debt funds increased by 6 per cent in August compared to July.