Mutual fund managers have pumped in a little over Rs 4,300 crore in the equity market in July, a slump of 58 per cent from the preceding month, primarily on account of subdued corporate earnings and higher valuation.
In comparison, mutual funds reported a net inflow of nearly Rs 31,000 crore in the debt market last month.
Industry insiders analysts attributed the decline in equity investments to higher valuation, subdued corporate earnings and Greek crisis.
However, they remain optimistic about equities in the long run.
As per a data released by the Securities and Exchange Board of India (SEBI), mutual fund managers invested Rs 4,339 crore last month, compared with Rs 10,325 pumped in June.
This is for the 15th month in a row, mutual funds have invested in equities.
Mutual funds have been witnessing net inflow in stock markets since May last year on account of expectation of reforms and favourable macroeconomic data. Since May 2014, they have made a net investment of more than Rs 70,000 crore in Indian equities.
Prior to that, fund houses were net sellers in April last year and pulled out Rs 2,700 crore.
A mutual fund is an investment vehicle with a pool of funds collected from various investors to buy securities such as stocks, bonds, money market instruments and similar assets.