Key equity mutual fund ratio slips for 3rd month, suggests caution for D-St | Jobs Vox

The total equity mutual fund turnover ratio fell to 1.09 in November 2022 compared to the long-term average of 1.59, data from the Association of Mutual Funds of India (AMFI) showed.

The ratio contracted for a third consecutive month, reflecting investors’ confidence in market momentum, amid rising concerns over high valuations and near-term growth prospects. The ratio was less than one to five among 11 equity plans.

The total sales of equity mutual funds were at a 14-month high of ₹26,029 crore in November 2022. The monthly average total sales of the last 12 months were ₹16,774 crore.

Large-cap funds, one of the largest categories of equity funds and often considered a hedge against uncertain times, reported a buy-to-sell ratio of 0.75 in November. It was the fourth consecutive month that the ratio was below 1.1. In flexi-cap funds, the ratio was at a 21-month low of 0.8. The two fund categories account for nearly one-third of total equity funds in assets under management (AUM) at Rs15.5 lakh crore. On the other hand, the ratio of mid-cap and small-cap funds was higher at 1.5.

Additionally, momentum in folio additions on the equity side is expanding. Equity mutual funds added 610,000 folios in November 2022, compared to the two-year average of 1.22 million.

Folio count for large-cap funds fell by 26,000 in November. In September, there were 138 million accounts in the MF industry, of which 91.1% were retail investors.

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