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Equity mutual funds recorded the third straight month of net inflows and touched a new high of ₹10,083 crore last month as against ₹3,437 crore logged in April, reflecting growing investors’ confidence in recent capital market rallly.
Except for equity-linked saving scheme which recorded an outflow of ₹290 crore, all other categories of equity funds registered a net inflow with multi-cap fund topping the table by attracting investment of ₹1,954 crore, said data released by the Association of Mutual Funds in India. Interestingly, Aditya Birla Sun Life Multi Cap had raised ₹1,900 crore through its new fund offer last month.
All other equity funds including mid-cap and focussed funds have received investment of ₹1,368 crore and ₹1,169 crore, while thematic and small-cap fund attracted ₹1,137 crore and ₹1,081 crore inflows.
Investor’s growing confidence
Redemption in equity schemes in May dipped, compared to April, suggesting that the investors are fast gaining confidence on the market outlook and are willing to invest substantially.
NS Venkatesh, Chief Executive, AMFI said that the retail equity-oriented contribution continues to be on the upward trend, while smart investors have diversified to Fund of Fund (FOF) schemes which invest in foreign equities.
Investment through systematic investment plan was up at ₹8,818 crore as against ₹8,596 crore logged in 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.
Interestingly, inflows in FOF jumped sharply by ₹2,424 crore largely due to two new fund offers in this category which raised ₹1,704 crore.
Over mutual funds industry, AUM, was up at ₹33.05-lakh crore last month as against ₹32.37-lakh crore logged in April.
Experts’ view
Aashish P Somaiyaa, CEO, White Oak Capital said there has been a rising trend of money flowing into international funds and investors need to be wary of trend following piling of more money into the developed market technology stocks in the late stages of a multi-year boom.
Himanshu Srivastava, Associate Director, Morningstar India said significant fall in fresh Covid cases over the last few weeks has provided comfort to investors while good positive earnings growth outlook and waning concern on second wave of pandemic would prompt investors to again allocate assets towards equities.
Akhil Chaturvedi, Head of Sales and Distribution, Motilal Oswal Asset Management Company said it is broadly felt that the pandemic waves are short lived and eventually economic activities will revive, giving boost to market sentiments.
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