MFs invest Rs 1.3 lakh crore in equities in 2024

New Delhi: Mutual funds (MFs) showed strong confidence in Indian equities this year, injecting around Rs 1.3 lakh crore, driven mainly by significant retail investor interest and the robust performance of the stock market.

Mutual funds, which manage long-term wealth for domestic investors, prioritise the Indian market’s underlying growth potential and are less rattled by short-term events like elections, which allows them to keep investing in equities, Tradejini COO Trivesh D said.

Additionally, the growing interest in systematic investment plans (SIPs) on the back of astonishing compounding stories by influencers and industry veterans has perked investors, who otherwise wish to stay away from the markets, to start participating through these mutual funds, he added.

According to the data from the Securities and Exchange Board of India (Sebi), MFs invested Rs 26,038 crore in the first fortnight of the ongoing month and Rs 20,155 crore in April. Moreover, the highest MF buying for 2024 was experienced in March, as they put in a net of Rs 44,233 crore.

Also, they invested Rs 14,295 crore in February and Rs 23,010 crore in January.

With the latest deployment, mutual funds investment in equities reached around Rs 1.3 lakh crore in 2024 (till May 16), the data showed.

In stark contrast, foreign portfolio investors (FPIs) have been withdrawing money from equities and pulled out over Rs 25,000 crore this year so far, owing to a volatile global environment, uncertainty over rate cuts, and profit booking.

This is a great sign for the Indian markets, symbolising the falling dependency on foreign money and the strengthening of retail individuals and DIIs, including mutual funds, to keep markets afloat.

This steady flow from mutual funds and other domestic institutional investors (DIIs) has supported the equity markets over the past few years.

Notwithstanding occasional challenges, the Indian stock markets have generally shown a positive trajectory, thus catching investors’ interest.

Equity has been one of the best-performing asset classes in recent years, and consequently receiving robust flows from domestic investors like mutual funds, Himanshu Srivastava, Associate Director Manager Research, Morningstar Investment Research India, said.