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Notwithstanding the upheaval in the stock markets, investors from top cities such as Mumbai, New Delhi, Bengaluru and Ahmedabad have kept their faith in the equity market by pumping in money continuously through mutual funds in the last three months.
The mutual fund equity assets of investors in Mumbai in December increased 6 per cent to ₹3.47 lakh crore from ₹3.29 lakh crore in November. It was ₹3.13 lakh crore in October, according to one of the mutual fund transfer agents, which owns about 55 per cent market share.
The increasing trend was largely due to investors continuing with their monthly systematic investment plans and corporates switching from fixed income to equities despite negative economic developments casting a shadow on the equity markets.
Along with the inflow of ₹5.08 lakh crore in fixed income, investors in Mumbai accounted for 37 per cent of the overall mop-up of ₹23.05 lakh crore (including fund-of-funds) in December.
Preferred vehicle
NS Venkatesh, CEO, Association of Mutual Funds in India, said retail investors have retained faith in mutual funds and continue to use the systematic investment plan as the preferred vehicle for investment in equities.
New Delhi’s investors’ equity mutual fund assets went up from ₹97,159 crore in October to ₹1.01 lakh crore in November and further to ₹1.02 lakh crore in December. Similarly, in the last three months, Bengaluru’s investors’ equity assets went up steadily from ₹59,042 crore to ₹61,482 crore and to ₹62,853 crore.
Interestingly, the top-three cities accounted for 45 per cent of the overall equity assets of ₹11.21 lakh crore.
Ashutosh Bishnoi, Managing Director, Mahindra Mutual Fund, said in a drifting market, retail investors, who came in via SIPs, are holding their nerve whereas the affluent investors have taken the exit route which makes one wonder at the traditional belief that the affluent investors are smarter.
SEBI’s regulatory stance got mutual fund investor-friendly and squeezed out fund houses’ margins. From investors’ behaviour, it is difficult to fathom whether they are enthused with the move, but surely in the long run it will bring the intended benefit to the business, he added.
Terming 2019 as a year of political turbulence, Bishnoi said markets will be in a wait-and-watch mode until things settle down.
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