Mutual funds have invested Rs 47,807 crores in the equity markets in 2015 till date
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Mumbai: The mutual fund industry has emerged as a major player in the domestic equity market as its total investment in equities have far exceeded the investment made by overseas investors in 2015.
Unlike foreign portfolio investors, which are facing huge redemption pressure from their clients, domestic fund houses are flushed with cash with strong inflow of funds from small investors on a month -on-month basis.
Mutual funds have invested Rs 47,807 crores in the equity markets in 2015 till date, which is almost 10 times more than the Rs 4,631.57 crore invested by foreign portfolio investors (FPI). “The confidence of retail investors to invest in the equity markets through the mutual fund route have increased. We are seeing sustained inflow of funds from small investors. From our side we are promoting the systematic investment plan (SIP) in a big way,” said Dinesh Khara, managing director, SBI MF.
In the month of August alone, MFs have pumped in Rs 9,490 crores into equities. This is when compared to Rs 16,936.23 crores worth of shares sold by FPIs. While markets across Asia and Europe have fallen more than the domestic equity markets, experts said that the Indian markets are still trading with attractive valuations.
“The Indian markets are trading 15-16 times their one year forward earnings while it’s 61 times for China, 20 times for Brazil and Russia and 19 times for the US. Our markets are still looking attractive and we could soon see a reversal in foreign fund flows,” said Deven Choksey, managing director, K.R. Choksey Shares and Stock Brokers.
Ramdeo Agrawal, joint managing director of Motilal Oswal Financial Services pointed out that FPIs are holding Indian equities worth $250 billion. “Even if they decides to reshuffle 10-15 per cent of their portfolio, it could create massive volatility in the Indian market. However, the biggest positive is that the domestic institutional investors like mutual funds and insurance firms have stepped up their buying in recent months,” he said.
( Source : deccan chronicle )
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