Inflows Into Equity Mutual Funds Jump To The Highest In 11 Months In February
Net inflows into equity mutual funds rose 37 percent over the previous month to Rs 10,795.81 crore in February.
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Inflows into equity mutual funds jumped to the highest in 11 months in February even as the benchmark indices tumbled amid the novel coronavirus outbreak.
Net inflows into equity and equity-linked schemes rose 37 percent over the previous month to Rs 10,795.81 crore, according to data released by the Association of Mutual Funds in India. That’s also the third straight month of inflows into the equity mutual funds.
The investments came even as the Nifty 50 plunged the most in 17 months in February, down 6.36 percent, as the coronavirus pose a new threat to the fragile recovery in India’s economy. The Indian indices tracked the global peers that witnessed the worst selloff since the 2008 crisis.
An analysis of the category-wise data showed that small caps witnessed the highest inflows since AMFI started offering granular data. The large-cap schemes, too, witnessed the biggest investments since August. The multi- and mid-cap schemes, however, witnessed a decline in monthly inflows. AMFI started offering granular data of equity inflows since April, according to the guidelines of the market regulator.
Contribution through systematic investment plans remained steady at Rs 8,512.93 crore in February. SIP monthly contributions remained above the Rs 8,000-crore mark for the 15 straight months.
“Individual investors continue to repose trust in the equity market, investing through mutual funds via the SIP route,” chief executive office at AMFI, told BloombergQuint. “We expect continued buoyancy in SIP flows in March too, though a few institutional investors may reassess their investment strategy, given the deep correction in markets,” Venkatesh said. “ELSS schemes continue to find favour with individual investors, with positive net flows at Rs 871 crore during the month despite the budget for 2020-21 proposing alternate simplified tax structure.”
Also, gold ETFs saw the highest inflows since 2008 at nearly Rs 1,500 crore in February as investors turned to the safe haven amid the selloff in the equity market. Investments into gold ETFs have been rising for the fourth straight month.
Overall, the mutual fund industry witnessed a net outflow of Rs 1,985.52 crore as investors pulled money out of the liquid or money market category. That compares with an inflow of Rs 1.20 lakh crore in January.
The schemes used by companies to park surplus cash for the short term witnessed an outflow of Rs 43,825 crore against an inflow of Rs 59,682.29 crore in January.
Total assets under management increased marginally over the previous month at Rs 28.29 lakh crore in February. Total equity assets rose 1 percent at Rs 7.95 lakh crore during the period.