Even as the stock market trades at high valuations, inflows into equity funds continue to soar. In October, investors pumped in Rs 16,000 crore—marking the nineteenth straight month of inflows. The monthly equity SIP flows for the industry now stand at over Rs 5,600 crore, compared to around Rs 3,500 crore a year ago. How the fund managers deploy this money today will determine what kind of return investors will get a few years down the road.
Given how stock prices have run up, there are very few investible opportunities left for fund managers to pursue. And the influx of money in a heated market environment poses a tricky challenge for fund managers.
