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Equity mutual funds (MFs) attracted a net investment of nearly Rs 40,000 crore during the quarter ended September 2021 thanks to a strong influx of new fund offerings (NFOs) and a stable SIP portfolio.
This is double growth compared to the previous quarter. The influx of funds pushed the asset base of equity funds to Rs 12.8 lakh crore at the end of September, from Rs 11.1 lakh crore at the end of June, according to data from the Association of Mutual Funds in India (Amfi), PTI reported.
According to Amfi data, the equities segment recorded flows of around Rs 39,927 crore in the September quarter, compared to an inflow of Rs 19,508 crore in the June quarter.
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Equity mutual funds have seen steady inflows since March. Previously, equity plans had regularly seen cash outflows for eight months, from July 2020 to February 2021.
‘Constant inflows of stocks indicate positive sentiment among investors in the Indian stock market as the economy gains momentum, companies rebound from pandemic disruption, abundant liquidity in the financial system and position of government support aimed at rapid economic recovery, â€Mohit Nigam, Chief – PMS, Hem Securities, said.
In recent months, India’s benchmark has gained the most among its Asian peers, making India one of the most favorable investment corners, he said.
Overall, the data looks positive for the industry, he said, as stocks and SIP numbers appear to support greater investor participation in mutual funds.
With the exception of stock savings plans (ELSS) and value funds, all categories saw an influx during the September quarter.
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The slew of heavyweight NFOs and stable Systematic Investment Plan (SIP) books have been instrumental in mobilizing new inflows of stocks.
Mutual fund experts have said that nearly 50% of net equity inflows are attributable to NFOs as asset management companies (AMCs) try to complete their lineup according to the categorization standards of the Sebi Scheme of the market regulator and certain others through thematic launches.
In equity fund categories, the flexi-cap segment recorded the highest net injection of Rs 18,258 crore, followed by sector funds which recorded a net investment of Rs 10,232 crore and targeted funds which have attracted Rs 4,197 crore.
In addition, multi-cap and mid-cap funds recorded net inflows of Rs 3,716 crore and Rs 3,000 crore respectively.
In addition, investments via the SIP route reached Rs 29,883 crore in the September quarter, compared to Rs 26,571 crore in the June quarter. In addition, monthly contributions to SIPs reached a record high of Rs 10,351 crore in September, up from Rs 8,596 crore in April.
“The good news on the SIP front continues with a monthly entry value finally crossing Rs 10,000 crore in September. This is encouraging as this is a significant jump from Rs 8,000 crore as the pound. SIP had shrunk to a year back.
“This clearly highlights the improvement in retail appetite as well as HNIs,†said Aashwin Dugal, Co-Chief Business Officer, Nippon India Mutual Fund.
With lower yields on debt instruments, including bank FDs and stable yields on gold, stocks are a preferred asset class, he added.
SIP is an investment vehicle that allows investors to periodically invest small amounts instead of a lump sum payment.
The frequency of investment is generally weekly, monthly or quarterly. It’s similar to a recurring deposit where investors deposit a small amount or a fixed amount each month.
Overall, mutual funds recorded a net inflow of Rs 99,974 crore in the three months ended September, up from Rs 69,625 crore in the previous quarter.
(With entries from PTI.)
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