Retail investors push equity MF inflow to Rs 16,000 crore in October

New Delhi: Equity mutual funds registered a an inflow of over Rs 16,000 crore in October, buoyed by strong participation from retail investors, latest data with industry body Amfi showed.

This has taken the total inflow into such funds to over Rs 96,000 crore in the first seven months of the ongoing financial year.

"The mutual fund industry has been among the biggest beneficiaries of demonetisation, which resulted in low interest rates on bank deposits. The move also helped investors shift from physical assets to financial savings. Years of perseverance by industry players and the regulator seems to have paid off, finally," Bajaj Capital CEO Rahul Parikh said.

"Inflows in April-October have already been robust. With 5 months to go in this fiscal and the burgeoning number of SIPs (Systematic Investment Plans) in equity and balanced funds, 2017-18 may go down as the best year yet for mutual fund inflows," he added.

According to the data with the Association of Mutual Funds in India (Amfi), equity funds, which also include equity-linked saving schemes (ELSS), saw net inflows of Rs 16,002 crore in October, compared to Rs 18,936 crore in the preceding month.

This also marks the 19th straight month of inflows into equity schemes. Prior to that, such funds had witnessed a pullout of Rs 1,370 crore in March 2016.

The strong inflows have pushed the asset base of equity mutual funds by more than 7 percent to Rs 7.08 lakh crore at the end of October, from Rs 6.6 lakh crore in the month before.

SIPs have been the preferred route for retail investors to invest in mutual funds as it helps them bring down market timing risks. The industry received about Rs 5,621 crore last month through SIPs compared to Rs 5,516 crore in September.

It is an investment vehicle that allows investors to invest in small amounts periodically, instead of lumpsums. The frequency of investment is usually weekly, monthly or quarterly.

Going ahead, Parikh said digital investment platforms are going to be a big driver for the industry.

"These platforms are the best bet to attract the young salaried generation of millennial - who otherwise are humongous spenders on gadgets, cars and bikes - and inculcate in them the virtues of saving and investing," he added.

The strong inflow in equity funds has also helped in pushing the assets under management of the 42-player mutual fund industry to an all-time high of Rs 21.41 lakh crore at the end of October, from Rs 20.40 lakh crore in September-end.

"We are particularly excited about the higher retail participation that has contributed to this growth," Sharekhan Director, Investment Solutions, Stefan Groening said.