Net inflow into equity mutual funds plunged 97 per cent to ₹2,142 crore last year after the ₹71,267-crore deluge in 2019.

Investors used the sharp rally in stock market in the later part of last year to book profit given the uncertainty over the revival of the Covid-hit economy.

The huge foreign fund flow into equity markets on the back of record low global interest rates boosted equity markets, which were reeling under the impact of the pandemic during the early half of last year.

The benchmark Sensex crashed 11,225 points to 29,468 in March from 40,723 in January.

However, it rebounded to 47,751 towards the year’s close, gaining 18,283 points in last nine months, as businesses across sectors learned to live with Covid.

Despite the pandemic-induced uncertainties, equity scheme assets of mutual funds increased 14 per cent to ₹9.06-lakh crore last month against ₹7.89-lakh crore logged in last January, thanks to the sharp market rally in the last three months.

Gopal Kavalireddi, Head of Research, FYERS, said incessant selling by mutual funds due to redemption by investors comes on the back of good stock market performance over the last nine months since the low logged last March.

Gautam Kalia, Head (Investment Solutions), Sharekhan by BNP Paribas, said after booking profits in October and November, investors have started ploughing back money with inflows into equity and hybrid funds increasing 76 per cent in December to 36,850 crore against ₹20,926 crore in November even though the redemptions in these schemes were higher than fresh fund flow.

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