Equity mutual fund inflows up in February

This indicates that domestic investors took advantage of the market correction amid a sell-off by foreign institutional investors due to high global inflationary environment and Russia-Ukraine tensions.

“Indian markets present a good buying opportunity after witnessing massive uptrend over the past few years. Despite seeing significant outflows from FII and FPI counters, domestic investors continue to use market corrections to invest in Indian equities. Most investors found the downtrend in the market to be a good entry point as evidenced by the amount of funds raised which has remained 33777.28 crore during the month of February 2022 and 33234.21 crore during January 2022,” said Kavita Krishnan, Senior Analyst – Manager Research, Morningstar India.

All equity categories received positive inflows during February 2022. Flexi cap and subject/sector funds saw the highest inflows. This could be on the back of new fund offers (NFOs) launched in these categories during the month; Three NFOs Launched in February Mopping 1,916 crores.

The number of new SIP (Systematic Investment Plan) accounts has increased by 12.44 lakh in February 2022, taking the total number of SIP accounts to 5.17 crore. However, the contribution from SIP has come down marginally in the last month from 78.9 crores 11,437 crore from the record level in the month of January.

“At this stage, the net domestic positive inflows are supporting the massive outflows witnessed by FIIs on a daily basis. A major part of the positive inflows are also due to strong SIP inflows of Rs 11k crore monthly, which continues to grow,” said Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC.

Note that equity inflows have remained positive for 12 consecutive months since February 2021.