AMCs - Weak Equity Lump Sum Flows, Debt Flows Await Interest Rate Peak: Motilal Oswal

Strong recovery in equity market, expectations of interest rate hikes by RBI play a meaningful role in gauging customer interest.

<div class="paragraphs"><p>Close view of Indian currency banknotes, rupee arranged for photograph. (Photo: Vijay Sartape/ Source: BQ Prime)</p></div>
Close view of Indian currency banknotes, rupee arranged for photograph. (Photo: Vijay Sartape/ Source: BQ Prime)

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Motilal Oswal Report

We interacted with a few large mutual fund distributors (having an assets under management in excess of Rs 10 billion) and institutional sales representatives to gauge customer behavior in the current environment. 

Strong recovery in the equity market and expectations of interest rate hikes by the Reserve Bank of India play a meaningful role in gauging customer interest for investing in Mutual Funds.

Over the past couple of months, a few major trends have emerged:

  1. resurgence of new fund offers in Q2 FY23 after a hiatus,

  2. steady trends in overall AUM,

  3. sustained high outflows from the debt segment, and

  4. new highs in monthly SIP inflows.

Our interactions with channel partners indicate:

  1. Lump sum flows have been under pressure as high net worth individuals await a better entry point.

  2. Slight moderation in NFO commission payouts.

  3. A slowdown in SIP accounts owing to weakness from smaller ticket rural customers,

  4. Growing inclination of HNIs towards long-term debt funds (target maturity funds).

  5. As large institutions expect further rate hikes, they are waiting on the sidelines and will commit to substantial long-term debt investments in due course.

Click on the attachment to read the full report:

Motilal Oswal Financials AMC Update.pdf


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