Equity mutual fund inflows rise in February
Premium- Despite witnessing significant outflows from FII and FPI counters, domestic investors continue to used the market correction to invest in Indian equities
Net inflows into open-ended equity-oriented mutual fund schemes rose about 35% to ₹19,644.86 crore in February compared with ₹14,552 crore in January.
This indicates that domestic investors took advantage of the market correction amid foreign institutional investors’ sell-off due to high global inflationary environment and Russia-Ukraine tensions.
“The Indian markets have been presenting a good buying opportunity after having witnessed a massive run-up over the past couple of years. Despite witnessing significant outflows from FII and FPI counters, domestic investors continue to use the market correction to invest in Indian equities. Most investors found the correction in the market as a good entry point which is evident from the quantum of fund mobilised which has remained at ₹33777.28 crores during the month of February 2022 and ₹33234.21 Crores during the month January 2022," said Kavitha Krishnan, senior analyst - Manager Research, Morningstar India.
All equity categories received positive flows during February 2022. Flexi cap and thematic/sectoral funds witnessed the highest inflows. This could be on the back of new fund offers (NFOs) launched in these categories during the month; three NFOs were launched in February mopping ₹1,916 crore.
The number of new SIP (systematic investment plan) accounts have gone up by a good 12.44 lakh in February 2022 taking the total number of SIP accounts to 5.17 crore. However, the contribution from SIPs in the previous month has come down marginally by ₹78.9 crore to ₹11,437 crore from record levels in January month.
“At this stage, net domestic positive flows are supporting the massive outflows seen by FII’s on daily basis. A large part of the positive flows is also due to the strong SIP flow of 11k cr monthly which continues to grow strongly," said Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC.
Note that the equity inflows have remained positive for 12 straight months since February 2021.
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