Equity mutual funds attracted Rs 15,685 crore in February, the highest net infusion in nine months despite significant volatility in stock markets.
This is higher than the inflow of Rs 12,546 crore seen in January and Rs 7,303 crore in December.
February marked the 24th straight month of inflows into equity-oriented mutual fund schemes, data from the Association of Mutual Funds in India (Amfi) showed on Friday.
The mutual fund industry saw inflows of Rs 9,575 crore in February on the back of healthy inflows into equity funds.
According to the data, total net inflows in equity schemes stood at Rs 15,685 crore. This was the highest level since May 2022, when equity funds attracted Rs 18,529 crore.
Investors continue to invest in a disciplined manner, braving volatility in stock markets caused by foreign portfolio investors (FPIs) exit, said Gopal Kavalireddy, Head of Research, FYERS.
Meanwhile, SIP (systematic investment plan) deposits have averaged over Rs 13,000 crore every month since October 2022.
Among equity funds, thematic or sector funds saw inflows of Rs 3,856 crore, followed by small-cap funds (Rs 2,246 crore) and multi-cap funds (Rs 1,977 crore).Apart from equities, Index funds continue to attract investors with total inflows of Rs 6,244 crore.
Meanwhile, Gold Exchange Traded Funds (ETFs) have seen infusions of up to Rs 165 crore.
“With interest rates expected to rise from current levels, debt funds continued to flow as investors stopped allocating between short- and long-term funds,” Cavalireddy said.
Overall, debt funds had a net outflow of Rs 13,815 crore last month, compared to an outflow of Rs 10,316 crore in January.
During the month under review, liquidity outflows were the highest at Rs 11,304 crore, followed by ultra-short term funds at Rs 2,430 crore and low term funds at Rs 1,904 crore.
“With inflation picking up after two months of cooling, the RBI is cautious about the changing situation and may choose to hike rates in the upcoming policy meetings. The US Federal Reserve has promised to (continue) interest rate hikes for a longer period. The terminal interest rate is expected to reach 6 percent to curb inflation. perhaps this will encourage further capital outflows from non-US markets,” he added.
Assets under management (AUM) of the 42-player mutual fund industry declined to Rs 39.46 crore at the end of February from Rs 39.62 crore at the end of January.
(Except for the headline, this story was not edited by NDTV staff and was published on a syndicated channel.)
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