look news india
Despite ongoing stock market volatility and geopolitical uncertainties, Indian retail investors’ confidence in the domestic stock market and equity mutual funds remains strong. Net inflows into equity-oriented mutual fund schemes have jumped 19 per cent to Rs 29,329 crore, according to the latest data released by the Association of Mutual Funds in India (AMFI). This is the largest inflows recorded in equity funds in the last four months. In sharp contrast, investors have made a net withdrawal of Rs 8,127 crore from fixed income and debt oriented funds, which are considered safe.
The largest part of the inflow of Rs 29,329 crore in the equity segment has gone to small-cap and mid-cap categories. According to the data:
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Small-Cap Funds: The highest net investment of Rs 7,973 crore came in this category, which clearly shows that investors are ready to take risks for higher returns.
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Mid-Cap Funds: Mid-cap schemes recorded strong inflows of Rs 6,989 crore, the strongest monthly level so far this cycle.
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Flexi-Cap Funds: Flexi-cap funds with diversified portfolios also saw positive inflows of Rs 5,059 crore.
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Large-Cap Funds: In contrast, large-cap funds investing in the country’s top companies faced selling pressure and the category recorded a net outflow of Rs 1,147 crore.
Systematic Investment Plan i.e. SIP, which has become the backbone of the Indian mutual fund industry, has once again created history. Contribution through monthly SIP by retail investors has reached a record level of Rs 32,297 crore.
With this, the total number of active SIP accounts in the country has crossed the historical figure of 10 crore (10.02 crore). It is this disciplined saving by retail investors that is giving domestic institutional investors (DIIs) the strength to stand firm in the face of selling by foreign investors (FIIs).
While there was a strong rise in equity funds, Rs 8,127 crore went out from fixed income i.e. debt funds. According to market experts:
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Corporate and Institutional Cash Cycle: The main reason for withdrawal from debt funds is withdrawal of money from liquid and overnight funds by corporates and financial institutions due to tax payments, quarterly advance tax liabilities and liquidity needs.
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Trend towards Equity: With interest rates remaining stable and expectations of better returns in the stock market, many HNIs and retail investors are turning to equity and hybrid funds by booking profits from fixed income instruments.
The total assets under management (AUM) of the Indian mutual fund industry has increased by 1.5 percent to an all-time high of Rs 87.08 lakh crore on the back of positive inflows into equities for the 66th consecutive month and market rally. The total number of folios has also increased to 28.35 crore. This data makes it clear that even in a volatile market, retail investors are focusing on long-term wealth creation rather than panicking in every downturn.