Mutual Fund inflows sustain for record 18 months; local buying hits $9 bn: Deutsche Bank

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New Delhi | Updated: November 08, 2015 1:16 PM

Inflows into equity mutual funds continued for a record 18th month in October with Rs 6,269 crore (around USD 964 million) flowing into various schemes.

Deutshe BankFrom January to September, net investments by MFs reported a monthly average of USD 950 million. (Reuters)

Inflows into equity mutual funds continued for a record 18th month in October with Rs 6,269 crore (around USD 964 million) flowing into various schemes.

Besides, domestic MFs have logged in the highest net buying of USD 9 billion in the first 10 months of this year.

According to a Deutsche Bank research report, inflows sustained into local equity MFs for a record 18th successive month.

“This was the 18th straight month of positive flows, and a strong sign that equitisation of savings is getting entrenched despite volatile equity market in past few months,” Deutsche Bank said in a research note.

The global brokerage firm noted that the trend of shift from physical assets to financial assets is a multi-year phenomenon, and a lower level of inflows were likely in near term due to volatile markets, a robust tax-free bond issuance pipeline, and an “unprecedented streak” of USD 20 billion net inflows in preceding 17 months”.

“While the pace of inflows has moderated in past two months (as against a monthly average of USD 1.36 billion between January-August 2015) we still see around USD 800 million-USD 1 billion clip as very healthy,” it added.

Moreover, in line with the sustained inflows into equity schemes, MFs in turn have continued to be net buyers of Indian equities for eighteenth straight month.

The report said however that the pace of net investments by MFs moderated sharply to lowest since January this year at USD 453 million in October this year.

From January to September, net investments by MFs reported a monthly average of USD 950 million.

“Cumulatively, domestic MFs have net bought USD 9 billion so far this year, making it the highest level of net buying by MFs on record,” the report added.

The 30-share benchmark index Sensex is currently trading around 26,000 level. The index had gained over 435 points or 1.66 per cent during October.

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