Investments in open-ended equity mutual funds fell 33% 9,390.35 crore in October, with investors cautious on higher valuations of Indian equities. However, he continued to show confidence in Systematic Investment Plans (SIPs), which had low inflows. 13,040 crore, crossing the 13,000 crore mark for the first time, as per the monthly figures of Association of Mutual Funds in India (Amfi). The BSE benchmark Sensex rose nearly 6% in October amid weakness in global markets due to slowdown and high inflation. In September, SIP contributions were on 12,976 crores.
“Markets continue to react to global factors and domestic rate hikes. However, mutual fund investors have shown flexibility and continue to invest in SIPs with consistent month-to-month contributions. There was also an overall increase in equity assets under management and folios, said NS Venkatesh, Chief Executive, Amfi.
However, experts flagged a decline in new SIP registrations. Akhil Chaturvedi, Chief Business Officer, Motilal Oswal Asset Management, said: “To really gauge the retail investor sentiment, we need to take a closer look at the decline of around 12% in the number of new SIPs registered in October as compared to the average of the last two months. Is required. ,
Sanjiv Bajaj, Joint Chairman and Managing Director, Bajaj Capital Limited said the slowdown in inflows into equity funds can be attributed to higher valuations of Indian equities, as it showed resilience in recent months and outperformed major global markets . The Nifty was up 1% since last Diwali, while the S&P 500 and Emerging Markets indices were down 16% and 31%, respectively.
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Except for dividend yield funds, most categories saw inflows into equities. Thematic or sectoral funds saw the highest inflows 2,686 crore, after that 1,582 crore for small-cap funds and Rs. 1,385 crore in mid-cap. “The good returns in thematic or sectoral funds can be attributed to two new funds launched by the fund houses during the month,” Bajaj said.
For fixed income, open-ended debt funds see outflow 2,817.97 crore in October as against a net outflow of Rs. 65,372.40 crore in September. The categories seeing inflows were liquid funds ( 19,084.60 crore), Long Term Fund ( 66.32 crore), Gilt Fund ( 146.31 crores), and gilt funds with a continuous tenor of 10 years ( 20.19 crore).
“The rising interest rate environment that has prevailed since May has resulted in investors preferring to exit the debt market in favor of equities. Kavita Krishnan, Senior Analyst Manager Research, Morningstar India said, “With the rate hike cycle aimed at containing inflationary pressures, investor preferences are shifting away from debt funds.
Further, marginal growth (net inflows) 147 crore) as seen for Gold Exchange-Traded Fund (ETF) with previous month AUM 19,881 crores. Priya Agarwal, money coach at LXME, a neo-bank for women, said, “The move may be directed by investors to gold assets as a tool for diversification of portfolio and hedge against market volatility. “
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