While the sharp correction by Indian markets on Monday caught many by surprise, an even more surprising development was that mutual funds received net inflows of more than Rs. 1,000 crore.
While there is no official data to confirm the trend, top fund officials and advisors confirm this. Savvy HNIs and corporates in particular are said to have entered the market on Monday to cash in on the opportunity.
“Investors have become more mature now. The inflows have been good and the volumes have also gone up,” said A Balasubramanian, CEO, Birla Sun Life Asset Management Company.
“Mutual funds received good inflows on Monday. Investors have rewarded well performing schemes by making additional investors. Our fund too has received good inflows,” said Vikaas Sachdeva, CEO, Edelweiss Mutual Fund.
SEBI data shows that mutual funds have invested a net Rs. 1,998 crore on August 24 in equities.
“We saw that a lot of investors used this opportunity to invest in mutual funds. Advisors also used this opportunity to encourage clients to invest,” said Aashish Somaiyaa, MD & CEO, Motilal Oswal Mutual Fund.
“Because of the fall in market our inflows were better than what we get every day, said Kalpen Parekh, CEO, IDFC Mutual Fund.
Advisors say that the mood among investors was upbeat on Monday, who used the dip to enter the market. “Clients did not panic this time. In fact, there was a lot of enthusiasm among clients to enter the market. We also received fresh investments in the last two days,” said Vinod Jain of Jain Investments.
However, Aashish cautions that the markets are expected to be volatile for the next 3-6 months. “It is a good trend but the situation in China is quite serious. Investors should tread with caution,” he adds.
Ajit Menon, EVP, Head - Sales & Co-Head - Marketing, DSP BlackRock Investment Managers says that distributors have played a key role in shaping investor behavior. “Distributors have been recommending investors to stay put. Both investors and distributors have realized that the situation is not as bad as the crisis which engulfed the markets in 2007-08. In fact, we have received more than 100 transactions (switches and fresh purchase) on Monday through our IFAXpress platform.”
Raghav Iyengar, EVP, & Head – Sales, ICICI Prudential Mutual Fund says that there has been a shift in investor mindset post 2007 crisis. “After the market crisis, investors have realized that they should invest when markets dip. This was the case on Monday when we received good inflows. The participation from retail and HNIs was good. This is definitely a positive trend for the industry.”
The mood of MF investors is evident by the inflows in equity funds. AMFI data shows that the industry received Rs. 10,400 crore net inflows in equity funds in April and Rs. 7,000 crore in March when the markets witnessed a correction. The BSE Sensex was down from 29,360 levels in February to 27,000 in April. All in all, the industry has received net inflows of Rs. 38,000 crore in equity funds YTD.
