Investment in equity mutual funds at record high

Monthly Systematic Investment Plans (SIP) contribution in mutual funds also broke records 11,305.34 crore in December as compared to previous high 11,004.94 crore in November, according to the data released by the Association of Mutual Funds in India (Amfi) on Monday.

Mutual funds had previous high levels of inflows 20,742.77 crore received in July 2021.

“If one raises this rate, the industry will lose 30% of its total equity assets under management (AUM) within a single year. This is a staggering number by any account. White Oak’s “The increased participation of investors in the country’s markets and economic performance is encouraging, and augurs well for the industry, investors and markets,” said Ashish P. Somaiya, Chief Executive Officer, Capital Management Ltd.

The inflows into equity MF schemes have also been led by the new fund offers (NFOs) launched in December. In all, there were six NFOs in equity-oriented schemes in the month—three each from multi-cap and sectoral/thematic funds—accumulating cumulatively valued assets. 12,446 crore, almost half of the month’s inflow.

Experts said the fall in the markets in November gave investors an opportunity to enter the market through mutual funds. The benchmark Sensex and Nifty rose nearly 2% after falling 4% in November amid concerns around the Omicron version of the Covid, sharply anticipated policy normalization by the US Federal Reserve and a consequent rise in bond yields.

“Despite concerns over Omicron, the growth outlook remains strong over the long term. The perception that the market will continue to bounce back, despite the intermittent correction, has kept many investors strong,” said Himanshu Srivastava, associate director-manager research, Morningstar India. Would have prompted them to take advantage of the recent fall in the market.

As on 31st December, the net AUM was at 37.7 trillion, while the number of folios was 120 million. According to Amfi, net inflows were positive for all categories of open-ended schemes during December, except income/debt-oriented schemes, which saw some outflow.

Even within the close-ended category, for the first time in this financial year, income/debt oriented schemes led by fixed term schemes have shown positive inflows. 180.37 crores as compared to 6.97 crore in November

NS Venkatesh, Chief Executive, Amfi said, “2021 has been a significant year, with mutual funds emerging as the preferred investment destination with consistent record equity inflows through NFOs and ongoing investments in existing schemes. SIP has consistently been the preferred mode of investment and disciplined way of saving by the common man. This is evident from the increasing number of accounts. Through regular financial literacy, retail investors understand the nuances of managing market volatility and risk adjustments through SIPs. Overall, 2021 has ended with an increase in disciplined investments through an increase in the number of SIP investments.”