Mutual fund investors keep faith despite crash

MUMBAI: Despite a 2,500-point slide in the sensex last month, retail investors in equity funds net pumped in almost Rs 15,500 crore into these schemes, indicating increasing level of maturity and knowledge about investing. Inflows through the SIP route remained above the Rs 12,000-crore mark, which also indicated improving investment behaviour among this group, mutual fund (MF) industry players said.
Data for June from Association of Mutual Funds in India (Amfi) showed that while flexi cap funds net pulled in over Rs 2,500 crore, the figure for large cap funds was Rs 2,130 crore and for large & midcap funds nearly Rs 2,000 crore. All growth and equity -oriented funds showed positive flows.


The strong flows into equity schemes, despite the market volatility that was witnessed in June, indicate that investors are putting their money into these MFs with the aim to generate returns in the long run, said Priti Rathi Gupta, founder of the financial platform for women — LXME. “It could also be a result of investors being more conscious of how important it is to have assets in their portfolios that can combat inflation,” Gupta said.
Data from the fund industry trade body Amfi also showed that during June, total inflows through the SIP route was Rs 12,276 crore, almost at the same level as Rs 12,286 crore in the previous month. Additionally, at nearly 5.54 crore, the number of SIP accounts touched a new high.
According to Akhil Chaturvedi, chief business officer of Motilal Oswal AMC, monthly SIP contribution continuing to remain above the Rs 12,000-crore mark indicates “better awareness among retail investors about long-term orientation of equity investments and understanding of current volatility as part and parcel of equity investing”. He also pointed out that in June, along with flows into equity schemes, hybrid funds also remained resilient despite relentless selling by foreign funds and market correction during the year so far.
In June, foreign funds had net sold stocks worth Rs 50,203 crore, the highest such figure since March 2020, data from CDSL showed. Amfi’s June data also showed a Rs 92,248-crore net outflow from debt funds. But this was mainly because of corporate withdrawals during the first half of the month to meet advance tax obligations that fell on June 15. Part of the outflow could also be attributed to banks wanting to avoid capital charge enforced by the RBI, said N S Venkatesh, chief executive of Amfi.

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