Investments into equity mutual funds rose after a month even as volatility spiked amid Russia's invasion into Ukraine, surging crude and relentless selloff by foreign investors.
Net inflows into equity and equity-linked schemes increased 32% over the previous month to Rs 19,705.2 crore in February, according to data released by the Association of Mutual Funds in India. That's the twelfth straight month of investments into such stock plans.
Indian equity benchmarks endured a tough month as they dropped as much as 4.4%. Rising commodity prices and uncertainties around the U.S. Fed tapering, too, spooked investors.
Category-Wise Trends
All segments witnessed inflows in February.
Large-cap funds witnessed the highest investments among all categories, followed by mid caps.
Investors have been pumping into mid caps since March last year. It's the sixth straight month of inflows into multi caps, and fifth consecutive for small-cap funds.
AMFI started reporting granular data since April 2019.
SIP Contributions
Monthly contributions into systematic investment plan fell after nine months.
SIP AUM took a hit, too, at Rs 5.49 lakh crore in February against Rs 5.76 lakh crore in January.
NS Venkatesh, chief executive officer at AMFI, in a conference call said it's “a positive sign that equity mutual funds saw inflows despite what happened in the markets in February”.
“Over the next few months, I expect the markets to rebound rapidly. India's inflation is not out of control, our economic conditions are fine. The only thing that is hitting us is the soaring crude oil prices which will also correct as the war abates,” he said.
Last month, Venkatesh had said starting February, there could be “certain apprehensions in the mind of investors because of corrections in the market”.
Debt Funds
Liquid funds, used by companies to park short-term cash, witnessed inflows after two months. Overnight funds, too, attracted investments.
Investors pulled out of credit risk funds for the third straight month.
Net Flows
All mutual fund schemes, debt and equity, saw a net inflow for the second month in a row.
Average and net assets under management stood at Rs 38.56 lakh crore and Rs 37.56 lakh crore, respectively, in February. That compares with Rs 37.9 lakh crore and Rs 38.01 lakh crore, respectively, in January.
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