Investors' faith intact

Mumbai: Despite the recent volatility and sharp slump in the equity markets, domestic fund houses have not witnessed any kind of redemption pressure from small investors.

While there has been a dip in fresh inflows during the last two months, according to industry sources, fund houses maintained that they are yet to experience any redemption pressure with some fund managers aggressively pushing large cap equity schemes.

“After the massive corrections on the domestic bourses, large cap stocks are now available at attractive valuations as compared to small and mid cap stocks.

This is a time when investors could actually relook and revisit their portfolio by adding some quality large cap stocks. We are now pushing two of our large cap equity sche-mes. As far as our fund house is concerned, we haven’t seen any major change in fund flows from retail investors as many of them are investing with a long-term perspective” said Dinesh Khara, managing director and chief executive officer (CEO), SBI MF.

According to Milind Barve, MD and CEO of HDFC MF, the industry hasn’t seen any kind of redemption pressure despite high volatility and steep corrections in the market.

“The fund flow from retail investors continues to remain strong. They are at the same level that we have seen during the past several months. There is still faith in the recovery of the market. Most of the investors have returned to the market after a long time and what we are witnessing now is the multi-year catch up in asset allocation towards equities,” he added.

Mr Barve also added that minor increase or decrease in net flows during a particular month should not be concluded as major trend reversal unless such a trend continues for at least 4 to 5 months.

According to data from the Association of Mutual Funds in India (Amfi), the net inflows into equity funds witnessed a slowdown in December 2015. The net inflow stood at Rs 3,644 crore, which were almost half the average monthly inflows seen during the January-November period.

In January till date, foreign portfolio investors (FPIs) have offloaded shares worth Rs 9,500 crore as a sharp slide in global crude oil prices and increasing concern regarding China-led global growth slowdown triggered massive risk aversion in global financial markets. As against this, the domestic mutual funds have invested over Rs 5,000 crore in domestic equities in this month.