Financial Daily from THE HINDU group of publications
Sunday, Apr 17, 2005
Financial Daily from THE HINDU group of publications Sunday, Apr 17, 2005 |
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Mutual Funds Markets - Mutual Funds Record inflow into equity funds in March Aarati Krishnan
, INFLOWS into equity funds set a new record in March, with the funds attracting fresh investments of Rs 8,800 crore. This is the highest level of monthly sales recorded by equity funds over the past six years. New equity funds that closed their initial public offers in March have mopped up a lion's share of the money at about Rs 7,000 crore. Equity fund inflows have repeatedly followed a pattern of accelerating when the stock market booms and drying up when the market turns moribund. Interestingly, the earlier record for equity fund sales was in March 2000, when the stock market was coming off a bull-market high, driven by the tech-stock boom. This time round, the inflows have displayed consistent buoyancy, for over a year and a half. Monthly inflows into equity funds, which began climbing in July 2003, have remained locked in the Rs 2,000-4,000 crore range before they peaked this March. But will the money continue to pour in, if the stock market turns choppy in the coming months? It is likely to; but the inflows may be of a lower order, say fund industry sources. "Investments will continue to flow into equity funds. But I see the inflows getting more selective, going forward," said Mr D.S.R. Murthy, Executive Director (Marketing) for UTI Mutual Fund. He said the investor preference for IPOs, when compared to funds with an established record, may not be a sustainable trend, especially if the market turns volatile. "There are issues about whether small investors (who invest through IPOs) completely understand the product. But the good funds with a performance record will continue to attract inflows," he said.
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