After bold reformatory steps taken by RBI, the investors have pump Rs 1.2 lakh crore Mutual funds in January.
With overall sentiments improving on the back of softer crude oil prices and lower interest rates as also the bold, reformative steps taken by the Reserve Bank of India, investors have pumped Rs 1.2 lakh crore into various mutual fund schemes in January. It is expected that mutual fund inflows will gather further momentum in the coming months.
According to data from the Association of Mutual Funds in India (Amfi), primarily on account of infusion in liquid and overnight schemes, a net inflow of Rs 1.2 lakh crore was witnessed in mutual fund schemes last month as compared to December last year when investors pulled out a massive Rs 62,000 crore.
There has been a strong inflow of around Rs 1.09 lakh crore in debt-oriented schemes alone. Among the debt-oriented schemes, liquid funds with investments in cash assets such as deposit certificates, treasury bills, and commercial paper for shorter horizon received flows worth around Rs 59,700 crore, which is the highest in the fixed-income category last month.
There has been an inflow of about Rs 22,652 crore in overnight funds too, which invest in securities with maturity of one day. According to a market expert, there is a noticeable trend on the fixed income side, that of a shift away from liquid funds to overnight funds. Since the introduction of exit load in liquid funds and certain other restrictions coming into effect from April 1 this year, the trend is expected to continue for some time.
There was also an outflow of Rs 330 crore in close-ended equity plans last month. Taking into account that the open-ended equity and equity-linked saving schemes witnessed an infusion of Rs 7,877 crore, the total equity inflows last month stands at Rs 7,547 crore, compared to Rs 4,432 crore the previous month.
According to a PTI report, the small-cap, mid-cap and large-cap funds saw inflows of Rs 1,073 crore, Rs 1,798 crore and Rs 1,154 crore, respectively, in January. The flow is well spread between the category of funds such as large-cap, mid-cap and multi-cap, among others. While Nifty Midcap 100 rose 5.31 per cent, Nifty small-cap rose 6.71 per cent.
Meanwhile, lowering of deposit rates by the government-owned banks such as SBI has also led to more retail funds flowing into mutual fund schemes. Retail investors are showing signals of preference for strong brand names such as the State Bank of India. SBI Mutual Fund, which recorded total assets under management (AUM) of Rs 3.82 lakh crore, has also been a major beneficiary of a steady stream of equity inflows through the government-run Employees Provident Fund Organisation (EPFO).Also, after the DHFL crisis, many institutional investors have moved their debt allocation to larger bank-led fund houses such as SBI MF, ICICI Prudential MF, HDFC MF, Kotak MF, IDFC MF etc. In equity assets, SBI Mutual Fund is the largest player, with Rs 1.94 lakh crore of assets compared with HDFC Asset Management Company’s Rs 1.54 lakh crore. In debt assets, however, SBI Mutual Fund is second to HDFC Mutual Fund.
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