Fresh Inflow Makes Equity MFs More Attractive To Invest

Funds receive over 9,000-cr infusion across most categories, look more robust for your long-term returns

Updated on: 9 April 2021 12:02 am

A net inflow of Rs 9,115.12 crore has come like the first spell of rain for equity-oriented mutual funds after a dry spell lasting over eight months. And, investors are sure to discover greener pastures in these instruments, assured of better yields.

According to the Association of Mutual Funds in India (AMFI), March saw funds infusion across all categories, barring Multi Cap Funds and Value Funds. Large Cap Funds received Rs 723.17 crore, Flexi Caps Rs 1,386.03 and Mid Caps Rs 1,502.53 crore, while thematic funds received Rs 2,009.35 crore, led by Equity Linked Saving Scheme (ELSS) funds, which received Rs 1,552.25 crore.

“There always remains great quality equity-oriented funds at all market levels based on the quality of the portfolio and the margin of safety of the portfolio,” says Omkeshwar Singh, who heads RankMF at Samco Group.

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Equity-oriented mutual funds are for longer term investments – of not less than five years – and investors aiming for these funds must continue their investments and not get distracted by the inflows or outflows, he says.

Even in the eight months of predominant outflows, many investors refused to rush for booing profits and map the exit route, according to AMFI.

“Second guessing the market movements is a futile exercise and outside the control of an investor. What investors must continue to aim for is attaining financial wellness which includes the foundational elements of household budgeting, protection requirements and finally, saving and investing based on your risk appetite and financial goals,” says Ajit Menon, CEO of PGIM India Mutual Fund.

The mutual fund industry saw its average assets under management scaling a record high of Rs 32.17 lakh crore as on March 31, 2021. It was an impressive 30 per cent growth over the last year. Systematic Investment Plans (SIPs) Asset Under Management stood at Rs 4.27 lakh crore at the same period.

An equity mutual fund scheme invests at least 65 per cent of its assets in equities and equity-related instruments, according to the Sebi Mutual Fund Regulations.