High volatility in the stock markets seems to have taken its toll on retail investor confidence in equity mutual funds.
Monthly data on inflows into equity mutual funds from the Association of Mutual Funds in India (Amfi) show that inflows were the lowest in 20 months in January.
Net inflows into equity mutual funds, at Rs.2,914 crore in January, were less than half the average monthly inflow of Rs.7,550.25 crore in 2015.
Inflows into equity mutual funds had picked by mid-2014 on expectations of a multi-year bull run after the business-friendly National Democratic Alliance (NDA) took charge at the centre.
There were expectations that the economy would be back on the high-growth trajectory and lead to a rebound in corporate earnings.
The recent volatility appears to have dented confidence, at least temporarily.
