MFs invest ₹ 5,526 cr in equities in April

New Delhi Continuing their buying spree for the second straight month, mutual funds invested Rs 5,526 crore in stocks in April with fund managers sensing opportunities after some consolidation in the market.

Investment by mutual funds (MFs) in equities will continue in coming months seeing the increase in user growths as multiple fintech players are entering into this space, Kaushlendra Singh Sengar, founder and CEO at INVEST19, said. Alok Aggarwala, Chief Research Officer, Bajaj Capital, is also of the view that this bullish stance to continue as valuations moderate somewhat post FY21 earnings and the consolidation provides investors with an opportunity to accumulate equities. Another factor driving this stance is the softening of bond yields from March onwards, forcing investors to flock to equities in search of higher returns, he added.

According to Sebi data, MFs put in a net amount of Rs 5,526 crore in equities in the month of April, much higher than a net sum of Rs 4,773 crore invested in March. This was the first such fund infusion by MFs in 10 months. Prior to the inflows, mutual funds had been withdrawing money from equities since June 2020, data available with the Securities and Exchange Board of India (Sebi) showed. "We have witnessed 15.8 per cent monthly investment growth by mutual funds into equities last month as volatile stock market pushed investors to invest via equity mutual funds to reduce risk," Sengar said. Alok Aggarwala, Chief Research Officer, Bajaj Capital, said mutual fund flows are generally a reflection of investor flows in the respective mutual fund schemes.