Investments into equity mutual funds slowed amid volatility in the stock markets on concerns around the Omicron variant and a selloff by foreign investors.
Net inflows into equity and equity-linked schemes fell 40% over the previous month to Rs 14,887.7 crore in January, according to data released by the Association of Mutual Funds in India. Still, that's the eleventh straight month of investments into such stock plans.
Indian equity benchmarks ended January with roughly 1% gains. That, however, masks uncertainty. A global tech selloff, rising oil prices, the U.S. Fed tapering and escalating tensions in Ukraine-Russia added to the volatility.
Category-Wise Trends
All segments witnessed inflows in January.
Large-cap funds witnessed the highest investments among all categories. Investors have been pumping into mid caps since March last year. It's the fifth straight month of inflows into multi caps, and fourth consecutive for small-cap funds.
AMFI started reporting granular data since April 2019.
SIP Inflows
Monthly contributions into systematic investment plans rose for the ninth straight month.
Monthly SIP contributions, according to the mutual fund lobby, hit a fresh high in January. The number of mutual fund SIP accounts also crossed 5 crore compared with 4.90 crore at the end of December.
“January was a reasonably good month. Net assets under management crossed 38 lakh crore for the first time. From February, there could be certain apprehensions in the mind of investors because of corrections in the market, but we expect to see good investments via SIPs since it's meant for long-term investment,” NS Venkatesh, chief executive officer at AMFI, was quoted as saying in a statement.
Liquid funds, used by companies to park short-term cash, witnessed outflows for the second straight month. Overnight funds attracted investments.
Credit risk funds, too, saw investors withdrawing for the second straight month.
Net Flows
All mutual fund schemes, debt and equity, saw a net inflow of Rs 35,251.6 crore in the first month of 2022 against an outflow in December.
Average and net assets under management stood at Rs 38.88 lakh crore and Rs 38.01 lakh crore, respectively, in January. That compares with Rs 37.91 lakh crore and Rs 37.72 lakh crore, respectively in December.
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