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Open-ended mutual funds saw net inflows of 1.26 trillion during the second quarter of financial year 2022. In the previous quarter, there were similar net inflows of 1.27 trillion, according to a report by Morningstar India. This report provides insights into estimated flows, asset trends and performance for domestic funds focused on the Indian equity and debt market. Overall, assets under management (AUM) of open-end funds stood at 36 trillion as of September 2021, up by 10% sequentially and 43% compared to September 2020.

“The past 18 months have turned out to be quite a turbulent year-plus for the Indian economy as both central and state governments tried to keep the impact of the novel coronavirus at bay," Morningstar India said. “After the gradual yet cautious easing of lockdown measures, the Indian economy has shown some signs of recovery. The Indian markets across market caps have seen a sharp bull rally over the past 18 months, albeit with some intermittent corrections, on the back of the ferocious correction witnessed in February-March 2021," it added.

The report noted that the open-end equity category saw inflows of 39,927 crore in the second quarter, significantly more than the 19,509 crore in the previous quarter. In fact, September quarter inflows were the highest in 10 quarters.

The ‘other schemes’ category, which typically has subcategories of exchange-traded funds or ETFs (other and gold), index funds, and fund of funds overseas saw net inflows of 33,296 crore in the second quarter. The fund houses that saw the highest net inflows (open-ended and ETFs) in the second quarter were SBI Mutual Fund ( 39,282 crore), Kotak Mutual Fund ( 20,649 crore) and Nippon India Mutual Fund ( 13,290 crore).

A significant portion of the net inflow in SBI Mutual Fund went into their new fund offer SBI Balanced Advantage Fund and a couple of equity ETFs.

Fund houses that saw the highest net outflows were Aditya Birla Sun Life with 3,453 crore, IDFC ( 3,119 crore) and Franklin Templeton ( 2,123 crore). Interestingly, the quarter saw new fund offerings of a total of 32 open-end funds (including ETFs) and 11 closed-end funds. Cumulatively, these funds were able to garner 49,283 crore at their inception stage.

Environmental, social, and governance (ESG) as a theme for investing has been getting a lot of traction, not only abroad but also in India now. Currently, there are eight open-end funds, one fund of fund, one ETF, and two global funds that follow the ESG philosophy style of investing. However, this category, cumulatively witnessed outflows of 97 crore during the quarter ended 30 September.

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