Investment in equity MF lowest in three months, SIP contribution hits new high in October

Analysts believe that the sharp valuations of the Indian markets are the primary season for low net exposure.

According to Himanshu Srivastava, Associate Director- Manager Research, Morningstar India, the net investment volume has declined since September, which could be the result of profit-booking by investors with market turnover at the highest ever level. Moreover, many investors would have opted to remain on the side-line given the high valuations, he said.

“The resumption of business activities and a spurt in the vaccination campaign have improved the growth outlook, helping markets touch new all-time highs on hopes of an economic recovery, amid a possible third wave of the pandemic and others. The risk can be reduced. Concerns in the interim. The NFO also continued to garner strong interest from investors. Passively driven funds on the back of a sharp rally in equity indices continue to attract investor interest,” he said.

Barring dividend yield and ELSS categories, all other equity categories received net inflows in October. In the Hybrid category, excluding Arbitrage and Hybrid Aggressive/Balanced, the remaining major balanced leverage/dynamic asset allocation schemes have reported flows.

Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC said, “With high net inflows in the hybrid and balance advantage category 10400 Crore symbolizes retail investors being prudent by taking a cautious approach at current market levels and adopting a balanced approach while investing in equities to a limited extent. This strategy is a good way to use proprietary valuation models of various mutual funds and have substantial investments in equities and not miss out on any gains; And at the same time there is enough cash to deploy in the event of any meaningful improvement.”

Monthly SIP contribution was at 10,518.53 crore as compared to October 10,351.33 crore in the last month.

After gaining 3% in September, benchmark indices Sensex and Nifty were almost flat in October on the back of a sharp correction towards the end of the month. Domestic institutional investors (DIIs) including mutual funds, insurance companies, pension funds and banks were net sellers of shares 5986.21 crore in October.

NS Venkatesh, Chief Executive, Amfi said, “It is heartening to see that investors stick to making mature choices by choosing schemes that offer a judicious mix of debt and equity through Balanced Advantage schemes, flexi-cap schemes And choose mutual funds as one of the investments for long term financial planning for your retirement and children’s welfare.”