Inflows into the equity mutual funds have hit a nine-month high of ₹15,686 crore in February against ₹12,547 crore logged in the previous month, as investors used the dip in market valuations to invest more money.
All the equity funds have received a positive inflow with thematic and small cap funds registering highest inflow of ₹3,856 crore (₹903 crore) and ₹2,246 crore (₹2,256 crore), as per data released by the Association of Mutual Funds in India on Friday.
Two thematic new fund offers have mopped up a record ₹2,540 crore. In all five equity NFO have mopped up ₹5,048 crore last month.
Multi- and mid-cap funds recorded an inflow of ₹1,977 crore (₹1,773 crore) and ₹1,817 crore (₹1,628 crore). The strong inflow was despite the equity asset under management falling marginally to ₹15.02-lakh crore (₹15.06-lakh crore).
SIP investments down
Manish Mehta, National Head, Kotak Mahindra Asset Management Company, said investors continue to add mutual funds on dips, while the SIP numbers remained strong as investors realise the benefit of long-term investing through SIP and staying invested.
Investments in hybrid schemes were moderate at ₹460 crore (₹4,492 crore) with equity saving and conservative hybrid schemes registering a net outflow of ₹206 crore (outflow of ₹91 crore) and ₹92 crore (inflow of ₹110 crore).
SIP contribution was down a tad at ₹13,686 crore against ₹13,856 crore largely due to lesser days in February.
NS Venkatesh, CEO, AMFI, said there was a dip in SIP contribution compared to January due to the fact that February had only 28 days.
“The SIP registered for 29-31 will be debited on March 1. This should lead to an addition SIP inflow of about ₹300 crore in March,” he added.
Debt funds
Outflows from debt funds continued for third month in a row at ₹13,815 crore against ₹10,316 crore in January due to rise in bank deposit rates.
Kavitha Krishnan, Senior Analyst, Morningstar India, said equity investors are making conscious decisions to invest in dips despite concerns on rate hikes, high inflation, geopolitical tensions and global slowdown.
Domestic investors are confident on domestic market and India growth story albeit foreign investors selling over the past month, she said.
Harsh Gahlaut, CEO, FinEdge, said rising interest rates have hurt debt fund returns over the past year with category average returns for most fixed income funds ranging from 3-4.5 per cent and investors are moving money to Fixed Deposits.