Investors have pumped in Rs 2.86 lakh crore into various mutual fund schemes in 2016, with 'liquid' and income funds attracting the most of the inflows.
In the previous year, a total of Rs 1.77 crore was invested in various mutual fund products, according to the data by the Association of Mutual Funds in India (Amfi).
"Investors may have seen the volatility of 2016 as a positive to average out costs. Retail investors also appear to have become savvier, using liquid schemes to either earn higher returns or to run Systematic Transfer Plan (STPs) into equity funds to average costs," said Srikanth Meenakshi, the COO at Fundsindia.Com, an investment portal for mutual funds.
"Apart from equity, inflows into debt funds have risen. Deposit rates have been falling, resulting in lower returns for investors. Falling rates help debt fund returns as yields instruments rally, which could have additionally helped draw in investors," Srikanth said further.
The latest inflows have been mainly driven by contribution from liquid as well as income funds. Besides, investors continued to maintained bullish stance on equity schemes.
Liquid or money market fund category witnessed Rs 1.37 lakh crore being poured in 2016. Income funds too saw net inflows of over Rs 56,000 crore. Equity and equity-linked schemes saw inflows of around Rs 51,000 crore.
Liquid and money market funds invest mainly in money market instruments like commercial papers, treasury bills, term deposits and certificate of deposits and have a lower maturity period and do not have any lock-in period.
An income fund emphasises on current income, either on a monthly or quarterly basis, as opposed to capital appreciation. Such funds usually hold a variety of government, municipal and corporate debt obligations, preferred stock and dividend-paying stocks.
Total assets under management (AUM) of all 43 active fund houses soared by Rs 3.52 lakh crore, or over 26 per cent, to a record Rs 16.93 lakh crore at the end of December last year, from Rs 13.41 lakh crore at December-end 2015.
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