Net inflows into equity mutual fund schemes hit a 14-month high in May at ₹10,083 crore crore compared to ₹3,437 crore logged in April, reflecting growing investor confidence in the recent market rally. This is the third straight month of net inflows.
Except for equity linked saving scheme, which recorded an outflow of ₹290 crore, all categories of equity funds registered net inflows, with multi-cap funds topping the table attracting investments of ₹1,954 crore, according to data released by the Association of Mutual Funds in India. Coincidentally, Aditya Birla Sun Life Multi Cap had raised ₹1,900 crore through its New Fund Offer in May.
While mid-cap and focussed equity funds received investment of ₹1,368 crore and ₹1,169 crore, thematic and small-cap funds got ₹1,137 crore and ₹1,081 crore, respectively.
Himanshu Srivastava, Associate Director, Morningstar India, said the significant dip in Covid cases over the last few weeks has provided comfort to investors while good positive earnings growth outlook and waning concern on the second wave will prompt investors to again allocate assets towards equities.
Redemption in equity schemes in May dipped compared to April suggesting that investors are gaining confidence on the market outlook and are willing to invest substantially.
NS Venkatesh, Chief Executive, AMFI, said retail equity-oriented contribution continues to be on the upward trend, while smart investors diversified to Fund of Fund schemes that invest in foreign equities.
Investment through systematic investment plans was up at ₹8,818 crore against ₹8,596 crorein April.
Debt funds recorded a net outflow of ₹44,512 crore largely due to withdrawal of ₹45,447 crore and ₹11,573 crore from liquid and overnight funds, respectively.
Inflows in Fund of Funds investing overseas jumped sharply by ₹2,424 crore largely due to two NFOs raising ₹1,704 crore.
Overall, the mutual funds industry’s AUM was up at ₹33.05-lakh crore in May against ₹32.37-lakh crorein April.
Akhil Chaturvedi, Head of Sales and Distribution, Motilal Oswal Asset Management Company, said it is broadly understood that the waves of Covid are short lived and eventually economic activities will revive giving boost to market sentiments.