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Equity mutual funds registered an inflow of over ₹20,000 crore in November, buoyed by strong participation from retail investors coupled with lacklustre performance of real estate and gold.
This has taken the total inflow into such funds to over ₹1.16 lakh crore in the first eight months of the ongoing financial year, as per the latest data with the Association of Mutual Funds in India (Amfi).
“The key contributor to this being significant flows in to equity through new funds and Exchange Traded Funds (ETFs).
We also see greater adoption of online investments starting to positively impact equity fund inflows,” Sharekhan Investment Solutions Director Stefan Groening said.
According to AMFI data, equity funds, which also include equity-linked saving schemes (ELSS), saw net inflows of ₹20,308 crore in November, compared to ₹16,002 crore in the preceding month. It stood at ₹18,936 crore in September.
This also marks the 20th straight month of inflows into equity schemes. Prior to that, such funds had witnessed a pullout of ₹1,370 crore in March 2016.
This was also the fifth consecutive month that saw net monthly inflows in excess of ₹10,000 crore.
The strong inflow has pushed the asset base of equity mutual funds to ₹7.33 lakh crore at the end of November, from ₹7.08 lakh crore in the month before.
“Mega Reform announcements from the government including PSU bank recapitalisation, Bharatmala Project have driven expectations of a solid earnings recovery in the next 2-3 years. Sentiments were also boosted by India’s ratings upgrade by Moody’s and continued FPI flows in equities,” Bajaj Capital CEO Rahul Parikh said.
“Lack luster performance by real estate and gold and low interest rates on traditional savings instruments have also contributed in pushing investor flows into equities,” he added.
SIPs have been the preferred route for retail investors in mutual funds as it helps them bring down market timing risks. It is an investment vehicle that allows investors to invest in small amounts periodically, instead of lump sum amount. The frequency of investment is usually weekly, monthly or quarterly.
The industry received about ₹5,893 crore last month through SIPs compared to ₹5,621 crore in October.
The strong inflow in equity funds has also helped in pushing the assets under management of the 42-player mutual fund industry to an all-time high of ₹22.8 lakh crore at the end of October, from ₹21.4 lakh crore in October-end.
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