Equity-oriented mutual funds had net inflows for the fourth month in a row in June 2021, with a net inflow of Rs 5,988.17 crore. While this is smaller than the net inflow of Rs 10,082. 98 crore seen in May, it is still a significant sum in absolute terms. Before March 2021, the category has seen net inflows for eight consecutive months.
Investors have been reassured by a significant improvement in the country’s coronavirus condition, as well as an improved recovery rate and a pick-up in vaccination campaigns. Good quarterly results and a long-term profits growth projection have sounded alarm bells of a serious economic effect from the second wave of the pandemic. Investor confidence was also encouraged by a market comeback despite difficulties. They have re-allocated assets to stocks as a result of these considerations.
“All equity-oriented categories had net inflows in June, except ELSS and Value/Contra Funds. The Mid Cap Fund category received significant investments as a result of the recent market increase, ranking as the month’s biggest benefactor with a net inflow of Rs 1,729.07 crore,” Srivastava stated.
Investors are increasingly interested in sector/thematic funds, since several of them have recently shown impressive results. Flexi Cap Funds received substantial investment because to its flexible investing style, which allows them to benefit from investment opportunities across market sectors.It enables the investors to invest in any firm, regardless of its market capitalization.
“Investors continue to invest in pure equity schemes, resulting in positive net sales of almost Rs 6000 crore,” said Akhil Chaturvedi, Associate Director, Head of Sales & Distribution, Motilal Oswal Asset Management Company. Due to increased redemptions, this is somewhat lower than previous month. For the time being, home investors are favouring Indian shares. It’s also heartening to see such strong demand for dynamic / asset allocation funds, with gross sales of Rs 4300 crore and net sales of Rs 2300 crore.”
The primary goal of funds in this category is to employ valuation algorithms to dynamically rebalance portfolios between stocks and fixed income, guaranteeing investors receive superior risk-adjusted returns. “Dynamic / asset allocation funds are an excellent alternative for investors in the current environment,” he continued.