Sunil Subramaniam, managing director of Sundaram MF, says, “I think the Omicron variant of Covid-19 is a worry for foreign investors. Domestically, even though Omicron cases are on the rise, people have seen how Covid-19 has been tackled in the last two waves and how the economy has recovered, which is giving them the confidence to invest in equities.”
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Equity mutual funds (MFs) ended 2021 on a strong note seeing record net inflows of Rs 25,076.71 crore in December, taking the net inflows for the year to Rs 96,669.97 crore, as per information from the Association of Mutual Funds in India (Amfi). Inflows through the systematic investment plan (SIP) course for December remained at Rs 11,305.34 crore, as against month to month SIP contribution of Rs 11,004.94 crore in November. Market players say Indian investors have kept on resting confidence in equity funds and inflows were high additionally a direct result of the new fund offers (NFOs) brought out by many fund houses. In December, fund houses launched six value oriented schemes, collecting Rs 12,446 crore. Three multi-cap scheme saw collections of Rs 9,509 crore, while other thematic funds collected Rs 2,937 crore.
In December, the benchmark Sensex rose around 2 per cent and in the last one year the index has surged nearly 24 per cent. Officials in the industry feel the overall flows into SIPs will remain strong in 2022 as well, but there could be some profit booking by investors.
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The number of SIP accounts rose to 49 million in December from 47.8 million in November. In the calendar year 2021 (CY21), inflows through SIPs stood at Rs 1.14 trillion and contributions have been more than Rs 10,000 crore every month since September. The assets under management (AUM) for the segment as at the end of December was Rs 5.65 trillion, as against Rs 5.46 trillion in November.
N S Venkatesh, chief executive officer of Amfi, said, “2021 has been a momentous year, with MFs emerging as the preferred investment destination with continued record equity flows through NFOs and ongoing investment into existing schemes. The year has seen remarkable growth in mutual funds with hike in inflows across all categories of funds.”
However, debt-oriented schemes saw net outflows of around Rs 49,154.10 crore in December, led by low-duration funds. Several debt categories like liquid funds, ultra-short-duration funds, corporate bond funds, and floater funds, among others, witnessed sharp net outflows. However, overnight and dynamic bond funds saw inflows last month.
Passive schemes such as index schemes, exchange-traded funds, and funds of funds investing abroad also collected Rs 18,702.45 crore in December. Overall, the MF industry saw net outflows of Rs 4,350.03 crore and average AUM as of December stood at Rs 37.91 trillion.