Equity mutual funds see massive inflows in February
Mutual fund investments in Indian equities witnessed a significant rise last month, with total inflows climbing 23% from January to Rs. 26,865.78 crore. This marked the highest monthly infusion into equity funds in over 23 months.
Data from the Association of Mutual Funds in India (AMFI) showed net contributions to small-cap funds declined 10% in February compared to the previous month. Mid-cap schemes also saw a 12% drop in inflows.
This comes after AMFI wrote to fund houses last month advising caution regarding small and mid-cap categories. Recently, these averments have gained huge investments, raising concerns over risks for investors.
While overall equity investments surged, the slowdown for small and mid-cap funds indicates investors may be becoming more prudent in a volatile market environment.
AMFI will hope its guidance has helped balance continued growth with sufficient protections for small investors. Only time will tell if this is a longer-term trend in strategies.
Nonetheless, the frenetic pace of contributions to stocks through mutual funds underscores retail enthusiasm and recovering confidence as India Inc. puts the pandemic behind.
