Equity MF U-Turn

The losing streak finally fell apart. After eight consecutive net flows, equity mutual funds saw net inflows 9,115 crore in March. At the same time, debt funds are coming out 52,528 crores, after they got inflow 1,735 crore in February, according to figures released by the Association of Mutual Funds on Thursday.

So, have retail investors become more favorable to return to equity funds? Such a conclusion may be premature. March figures are influenced by year-end tax payments and portfolio regimes and describe some debt flows. Equity-linked savings schemes are among the best performing categories of equity funds. Strictly speaking, while tax savings schemes are doing well, flows are spreading politely in other equity categories, with the exception of a few. Also, investments through systematic investment plans or SIPs can reach a monthly high 9,182 crores. Perhaps all of this will reflect the recovery in household income since last year’s Kovid Crunch. If so, this is another aspect of ‘normalization’. Stock market indices have risen sharply in recent months. But it is unclear how common these levels are.

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