New Delhi: Mutual funds have poured over Rs 1.3 lakh billion into Indian equities this year, demonstrating the market's strong confidence. According to analysts, this increase in investment is due to high retail investor interest and the stock market's strong performance notwithstanding global uncertainty.
According to data from the Securities and Exchange Board of India (Sebi), mutual funds displayed steadfast devotion, investing Rs 26,038 crore in the first fortnight of May and Rs 20,155 crore in April. The pinnacle of mutual fund purchase occurred in March, with a net investment of Rs 44,233 crore.
In contrast, foreign portfolio investors (FPIs) have been withdrawing assets from Indian shares, pulling out over Rs 25,000 crore at the same time, blaming "global volatility and profit booking."
The growing interest in systematic investment plans (SIPs), powered by enticing compounding storylines, has encouraged investors to enroll in mutual funds, indicating increased market trust among retail customers.
Mutual funds investments occured most heavily in financial services, followed by information technology and pharmaceuticals. Over the last year, allocations to industries such as pharmaceuticals, power, construction projects, and vehicles have also increased significantly.
With mutual funds' ownership of NSE-listed businesses at an all-time high of 8.92 percent and FPIs' share falling to an 11-year low of 17.68 percent, domestic institutional investors are increasingly playing a critical role in supporting the equity markets.
Experts remain bullish about the prognosis for mutual fund investments in equities, predicting a further shift toward mutual funds as the major equity investment vehicle, particularly as traditional asset classes such as debt lose popularity among investors.
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