In a volatile market, MFs' the way to go!

Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

Never mind the volatility, nothing seems to be stopping retail investors from flocking to the stock markets. Four equity funds have mopped up Rs 4,500 crore through new fund offers in December so far, reports CNBC-TV18.

 

Indian retail investors don't seem to be worrying about the continuing rise and volatility in the markets. They perhaps believe the Indian growth story is intact and markets will only go up in the medium to long term. No wonder 7 lakh investors have put it in over a billion dollars or Rs 4,500 crore into New Fund Offerings, NFO in December itself.

 

Reliance Long Term Equity Fund has raised about Rs 2100 crore from over 5 lakh investors while Pru ICICI Equity and Derivative Fund has raised Rs 2200 crore through 1.5 lakh applications.

 

Sources say that funds like Lotus India Tax Plan and HSBC Taxsaver Equity Fund together added another Rs 200 crore. This is the highest collection by equity NFOs in a month since June.

 

In June, new equity funds collected just over Rs 1,800 crore, but in July, they garnered just about Rs 1045 crore. No funds were launched in August. In September, equity NFO collections stood at Rs 330 crore. In October, new funds mobilised Rs 1466 crore, while November saw an inflow of Rs 1671 crore in new equity funds.

 

December NFO collections could go even higher as DSP ML Tax Saver Fund closes tomorrow and SBI One India Fund closes on 22nd of this month. Retail investors clearly are far from unnerved by the rise in the markets and instead appear to be maturing in investing for the medium to long term.

 

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