Equity mutual funds saw an inflow of close to Rs 4,900 crore in January, taking the total fund infusion to about Rs 55,700 crore by 'optimistic' investors in the first 10 months of 2016-17 fiscal. This also marks the 10th straight month of inflows into equity schemes. Prior to that, such funds had witnessed a pullout of Rs 1,370 crore in March.
"Healthy SIP (systematic investment plans) book continues to support fresh inflows in equity segment of mutual funds, despite a quarter of volatile markets," Bajaj Capital National Head Mutual Funds Anjaneya Gautam said. "Traditionally, ELSS collections increase in peak tax savings period of January to March every year. But net inflows in ELSS in January 2017 are much higher than last 3-4 years, about Rs 1,166 crore fresh addition. It shows the confidence of investors in long-term savings through equity investments," he added.
Mutual funds have been witnessing a trend of increasing fresh investments through the route of SIP, balance Funds, other equity funds, and it is expected to reap benefits to the investors, Gautam said. SIP is an investment vehicle that allows investors to invest in small amounts periodically instead of lumpsums. The frequency of investment is usually weekly, monthly or quarterly.
According to data from Association of Mutual Funds in India (Amfi), equity funds, which also include equity-linked saving schemes (ELSS), registered a net inflow of Rs 4,880 crore in January against Rs 10,103 crore in the preceding month. With the latest inflow, total mobilisation in equity schemes has reached to Rs 55,689 crore in April-January period of the current financial year. The robust inflow has pushed up assets under management (AUM) of equity MFs to Rs 4.97 lakh crore at the end of January, from Rs 3.86 lakh crore in March-end. Growing participation from retail investors and huge inflow in equity schemes have also helped increase the folio count. Equity mutual funds witnessed an addition of 35.65 lakh investor accounts or folios in the current fiscal so far. Going forward, ELSS category will see higher inflows during February and March 2017 because investors will be looking forward to tax-saving options. ELSS, with attractive market valuations, is making a strong case for fresh investments.