MF investors bet over Rs 17K crore on key equity schemes amid selloff

Equity schemes continue to witness net inflows, driven by SIPs

Demonstrating resilience, mutual fund investors pumped nearly ₹17,100 crore into key equity schemes on a net basis over the past few weeks despite a heavy selloff in the markets. Since reaching their all-time highs on September 26, benchmark equity indices --  Sensex and Nifty 50 -- have dropped nearly 7 per cent.

 

An analysis of assets under management (AUM) and net asset values (NAV) of major equity mutual fund schemes revealed that even as NAVs declined, investors continued to invest more. Between September 26 and October 22, largecap schemes garnered net inflows of over Rs 2,600 crore, while midcap and smallcap funds saw a combined net investment of Rs 7,000 crore, according to estimates based on Association of Mutual Funds in India (Amfi) data. Meanwhile, flexi-cap schemes attracted approximately Rs 4,000 crore during the same period.

 

 

For comparison, these four mutual fund categories have been pulling in around Rs 10,000 crore in net investments monthly over the past year.

 

Large-and-midcap funds, too, witnessed net inflows of Rs 3,351 crore between September 26 and October 22. 

 

This steady inflow from domestic mutual funds helped cushion the impact of market declines amid record selling by foreign institutional investors (FIIs). Mutual funds, this month, have collectively purchased equities worth nearly Rs 66,000 crore (until October 21).

 

In recent years, mutual fund investors have increasingly shown a pattern of investing more during market downturns. Additionally, inflows through the systematic investment plan (SIP) route have grown steadily, even in times of volatility.

 

Experts advise investors not to get swayed by short-term market volatility and to stay committed to their asset allocation strategies and SIP investments. Rahul Jain, president and head of Nuvama Wealth, remarked: "Amfi data suggests that investors have weathered the storm effectively, indicating maturity in their investment management.”

 

Investors must maintain discipline across equity, debt, and gold based on their risk profile, investment horizon, and goals, he suggested, adding that they must not panic and avoid discontinuing SIPs. “In fact, in times like these, they can garner more units at lower NAVs. This will truly help in rupee-cost averaging.”

 

Ajit Mishra, senior vice-president, research, Religare Broking, echoed the sentiment, advising investors to take a balanced approach. "During such periods… keeping some cash on hand provides flexibility, but staying entirely on the sidelines could mean missing out on potential opportunities.”

 

This financial year (FY25) has seen record inflows into equity mutual funds. In the first half of FY25 alone, investors have poured a net Rs 2 trillion into equity schemes, surpassing the Rs 1.8 trillion inflows seen over the entire FY24.