MFs pump Rs 7K cr in equities in Jan; FPIs in sell-off mode

New Delhi: Mutual fund houses made investment of over Rs 7,000 crore in domestic equities in January, even as foreign investors pulled out a massive Rs 5,200 crore.

The sell-off by foreign portfolio investors (FPIs) from the Indian equity markets has provided an opportunity to mutual fund managers, experts believe.

According to the data available with Sebi and depositories, fund managers bought shares worth Rs 7,160 crore on a net basis last month. On the other hand, FPIs pulled out Rs 5,264 crore from equities.

Investment in domestic equities by fund managers could be largely attributed to retail investors who continue to invest through systematic investment plan (SIP), market experts said.

The fund houses believe that the uptrend may continue in the coming months too as large amount of flow is expected through the SIP route.

SIP is an investment vehicle that allows investors to invest in small amount periodically, instead of a lump sum payment. The frequency of investment is usually weekly, monthly or quarterly. It is similar to a recurring deposit where investors deposit a small or fixed amount every month. The outflow by FPIs from equities indicates their 'wait and watch' approach ahead of the elections.