Mumbai: Buoyed by sustained inflow of funds from small investors, the mutual fund industry has pumped in Rs 72,218 crore in domestic equities in FY16, it is the highest ever investment in any fiscal year. While fresh inflows into equity schemes have shown some signs of slowdown in the last three months amidst weakness in global markets, fund managers said the industry didn’t witness any kind of redemption pressure despite high bout of volatility in the secondary market.
During the previous financial year, fund houses had invested Rs 40,821.90 crore in equities after remaining net sellers for consecutive five years. “Investors remained quite bullish on the equity markets. They continued to pour money even when the markets were at higher levels.
Last year, we advised investors to slowdown a bit as the valuations were looking quite expensive. However, with the markets witnessing a sharp correction from their peaks, the valuations have become quite attractive from a long-term perspective and we have asked investors to add more stocks into their portfolio,” said I.V. Subramaniam, director, Quantum AMC.
He pointed out that his fund house hasn’t seen any kind of redemption pressure from investors despite high volatility in the secondary markets. “The best way for an investor to beat the volatility is to invest through the systematic investment plan (SIP),” he added.
According to data available with Association of Mutual Funds in India (AMFI), individual investors held Rs 5.98 lakh crore in mutual funds as of February 2016, an increase of 8.37 per cent over February 2015.
Investors holding in equity schemes increased by 6.93 per cent during the same period, which stood at Rs 3.37 lakh crore. The average ticket size of a retail investor is Rs 63,176 per account while high net-worth investors held Rs 20 lakh per account. AMFI said the equities have a longer average holding period as compared to non-equity assets.
