The sharp correction in share prices has led to a slowdown in net inflows into equity schemes of mutual funds, reports Chirag Madia in Mumbai. Equity schemes saw net inflows of just Rs 2,128 crore in January, the smallest amount since May 2014, when the BJP came to power, data from the Association of Mutual Funds in India show.
In May 2014, net inflows into equity schemes was Rs 2,452 crore and since then there has been a continuous rise. In 2015, equity schemes saw Rs 85,000 crore move in. However, in January, the flows slowed down largely due to the volatility in the equity markets.
Dinesh Kumar Khara, MD and CEO at SBI Asset Management Company, said flows in the past few months had been reasonably strong but had slowed down. “Even after such a sharp correction in the markets, equity schemes have seen money coming in which shows maturity of investors,” Khara said. In the last one year, the broader indices have fallen by about 14% due to a combination of factors, both global and local.
Industry participants believe that if the markets remain volatile, it will be a challenge to attract retail investors.
In January, mutual funds saw inflows of Rs 22,569 crore. However, gold exchange-traded funds and fund of fund schemes that invest overseas saw money move out. “There has been lot of demand for balanced schemes in the last few months as they can give better returns in such a scenario,” one CEO of a large fund said.