Mutual funds infused Rs 5,526 crore in equities in April and continued their purchasing spread, identifying opportunities for fund managers in the aftermath of market consolidation.
In the coming months MF investment in stocks will continue to grow as several fintech players enter this area, said Kaushlendra Singh Sengar, founder and CEO of INVEST19 to PTI.
Meanwhile, Alok Aggarwala, Chief Research Officer of Bajaj Capital, also expressed the view that this bullish stance would continue with moderate evaluations after FY21, which give investors the chance to collect equities.
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Another driving factor is to soften bond returns from March, forcing investors to flock to stocks in search of higher returns, he said.
According to SEBI data, in April, MFs put Rs 5,526 in net equity amounts, far higher than the net amount invested by Rs 4,773 in March.
This was the first MFs infusion of this type of fund in ten months.
Before the inflows, since June 2020 mutual funds withdrew money from shares, the available data with the Securities and Exchange Board of India (SEBI) were revealed.
Mutual Funds growth
“We saw 15.8 percent monthly growth in equity investment from mutual funds last month as volatile equity markets pushed investors through equity mutual funds to reduce the risk,” Sengar added.
Alok Aggarwala, Bajaj Capital chief research officer, stated that mutual fund flows generally reflect investor flows in each mutual fund scheme.
Since July 2020 and March 2021, domestic investors have taken money from mutual fund programs as the first month in which the trend changed.
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Moreover, in March, an increase in SIP flows increased to Rs 9.182 crore from Rs 7.528 crore in the preceding month. Therefore, the positive flow into equities through mutual funds was observed in March, he said.
Although the data is not yet available, this net inflow trend for equity mutual fund schemes also seems to continue in April 2021 leading to positive mutual funds flows, he added.
“The month of April saw an increase in the number of COVID-19 cases leading to minor corrections in the markets, but quick recoveries followed. Mutual funds purchased new stocks in the market this fall, resulting in increased share inflows even in April-2021 “Gautam Kalia, Head of Investment Solutions, BNP Paribas’s Sharekhan, said.