Investment in equity mutual funds down from December high

The decline in equity inflows could also be due to the absence of fresh fund offers (NFOs) in January. The mutual fund house launched six growth- or equity-oriented schemes, mopping up 12,446 crore in December as against zero new schemes last month.

Despite the volatility, retail investors remained confident, as data released by the Association of Mutual Funds in India (Amfi) on Wednesday showed that contributions from systematic investment schemes (SIPs) set a new record. 11,516.62 crore at the end of January, as against 11,305.34 crore in December. Moreover, the total number of SIP accounts crossed the 50 million mark for the first time in January. According to the industry body, the total SIP book was 5.76 trillion at the end of January as against 5.65 trillion in December.

The latest data showed that equity inflows have remained positive for 11 consecutive months since February 2021, with some moderating in January.

“Worries of new COVID variants across the world, relatively high valuations and rising inflation are putting some pressure on the economy. Kavita Krishnan, senior analyst-manager research at Morningstar India, said factors, among others, have reduced the magnitude of inflows over the past month.

The Indian equity markets have seen a correction in the recent times keeping pace with the global markets. Even though the BSE Sensex fell marginally by half a percentage point during January, the index witnessed wild fluctuations during the month, registering a fall of over 4,000 points.

According to Amphi, the total assets under management (AUM) have increased by more than 25% on a yearly basis 38.01 trillion at the end of January. The monthly net addition to the total AUM was 28,514 crore during the month.

NS Venkatesh, CEO, Amfi said: “Retail mutual fund investors’ confidence in India’s growth story, as reflected through continued high volumes of monthly SIP inflows and with the economy expected to grow at 9.2% Uncertainties arising from external factors such as Fed rate hikes or FII outflows.”

Flexi-cap funds with a net inflow of Rs. 2,527.16 crore as compared to 2,408.64 crore in December. Small, large and mid cap funds also saw good exposure. Hybrid category sees dynamic asset allocation or inflow of balanced advantage funds 2,762.95 crore. “While we are seeing FII outflows, we are also seeing positive inflows from domestic investors. This is a very positive change among investors; It is always advisable to buy on the downside for a better rupee-cost averaging which results in good results in the long run. It is also encouraging to see positive inflows into the dynamic category, as most of the schemes maintain a good mix of debt and equity to benefit from the market correction and increase in equity allocation,” said Akhil, Chief Business Officer, Motilal Oswal Asset Management Company. Chaturvedi said. Ltd.