MF investment in equity rises to `39,500 crore in H1 2020

NEW DELHI: Mutual funds net invested nearly Rs 39,500 crore in the stock markets in the first six months of 2020, more than four-times the amount infused in the year-ago period, as volatility and correction in the broader markets provided a good investment opportunity for investors. Further, consistent SIP (systematic investment plan) inflows into equity funds gave fund managers a healthy stream of capital to keep buying quality companies, experts said.

This comes in the backdrop of the coronavirus pandemic related disruptions, a sharp slowdown in economic activity across the globe and a steep sell-off in equities in March 2020.

Overall, mutual funds (MFS) have made a net investment of Rs 39,478 crore in stocks during January-june 2020, much higher than the Rs 8,735 crore invested in the first six months of 2019, latest data available with the Securities and Exchange Board of India (Sebi) showed.

Of the total, more than Rs 30,000 crore was invested in March alone, when equity markets witnessed a sharp sell-off. “The volatility and correction in the equity markets has provided good investment opportunity for investors,” said Himanshu Srivastava, DirectorManager Research at Morningstar India.

He further said despite challenges, flows into equityoriented mutual funds have been good this year, displaying a more mature investor behaviour wherein they are looking at corrections as an opportunity rather than threat. Consequently, good flows into the funds and attractive valuations have enabled mutual fund to park more investments into the market and capitalise on this investment opportunity, he added.