Equity MFs (including ELSS) received record net inflows of about Rs.12,727 crore in July. And if this goes by the industry convention of adding at least 50% of inflows in balanced funds as equity inflow, the total figure would be in the range of Rs.16,660 crore.
Total assets managed by the MF industry as of end-July rose to an all-time high at Rs.19.97 lakh crore, a 31.5% annual growth. Also, equity assets were at an all-time high at nearly Rs.7 lakh crore, or about 35% of the total industry assets. In July liquid funds witnessed net outflow of about Rs.19,500 crore.
Compared with the huge net inflows in equity funds, total purchases of stocks by fund houses in July were of about $1.9 billion, which was 2.3 times the money deployed by FIIs. In each of the last four months, domestic fund houses have pumped in more money into Indian stocks than their overseas peers. Though foreign funds are marginally ahead of equity MFs in investments so far in 2017, their overall performance for the year is largely due to the massive Rs.30,906 crore net inflow in March.
While the stock market is rallying, interest income from fixed income products, like bank and company deposits, is falling due to cut in the rate of interest in the economy. Gold and real estate have not given good returns over the last few years. Due to these reasons people are looking at other asset classes, including shares.