Friday, December 9, 2022

Mutual Funds turn net consumers; invest Rs 2,476 cr in March

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The joint venture invested Rs 2,476 crore in equities in March, making it the first such offer in ten months, as market integration provided investment opportunities for financial managers. Kaushlendra Singh Sengar, founder and CEO of INVEST19, said revenue generation (MFs) income would dry up soon.

Prior to the cash flow, mutual funds (MFs) had been withdrawing funds from June 2020, details available through the Securities and Exchange Board of India (Sebi) have indicated. “Markets had a problem in March and sometimes less than 4% to 5 percent from the beginning of the month. If we look at the last few places, the market has continued to grow and many investors have opted to book profits, ”said Harshad Chetanwala, founder of Mywealthgrowth.

He also said that some of the signs of market integration offer opportunities to support managers to invest in positive ideas if they find themselves attractive. “While we will have to wait for Amfi’s physical data on registration and redemption, market instability would also halt redemption to some extent and therefore a new flow would also be able to find a way in the market,” he added.

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Harsh Jain, co-founder and COO of Groww believes that the pressure for joint ventures is reduced as markets remain volatile and there has been no significant decline in the market despite the second wave. That might help with the feelings of the investors.

In addition, there are many new opportunities emerging in the stock market as economic recovery in India is stagnant and investors are relieved with the idea of ​​investing in risky assets such as anti-traditional assets such as FD, gold, add-ons.

In recent weeks, with rising cases in India, markets have seen some minor adjustments in their recovery. Before that, markets had risen sharply in a few months. Joint funds used these dips to buy new shares and add to existing ones, ”notes Jain.

According to Sebi’s details, MFs deposited a total of Rs 2,476.5 crore in companies in March. Prior to that, MFs withdrew Rs 16,306 crore from stocks in February, Rs 13,032 crore in January, Rs 26,428 crore in December, Rs 30,760 crore in November, Rs 14,492 crore in October, Rs 4,134 crore in September, Rs 13, crs in September, Rs Rs 9,195 crore in July and Rs 612 crore in June.

This exit is mainly due to investment bookings by investors during the meeting in the stock market. However, MFs have invested more than Rs 40,200 in the first five months (January-May) of 2020. In this case, Rs 30,285 crore was invested in March 2020. The latest investments made by each other are due to the closure of the financial year as most people look at tax benefits while making investment and equity-linked saving scheme (ELSS) savings. said Sengar of INVEST19.

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ELSS has allowed tax deductions of up to Rs. 1.5 lakh under section 80C. The closure period on ELSS is only three years less compared to other tax-saving investment products. According to Sengar, equity has been more profitable compared to other categories of investment assets, which is one of the things that attracts people to invest in ELSS.

“I think many investors do not yet have the hang of the real nature of this beast that is a stock market,” said Rahul Shah, head of research, at Equitymaster. “At a time when most of the money should have been brought in when the markets were attractive last year, we have seen a decline in revenue, which turned out to be inflation in July 2020.

This behavior harms their long-term return from finance so they should be careful not to make this mistake over and over again. The idea is to be scared when some are selfish and greedy while others are scared and not the other way around, says Shah.

On the other hand, the joint ventures contributed more than Rs 14,000 crore to the credit market in the month under review. Apart from the combined funds, Foreign Portfolio Investment (FPIs) investors invested Rs 10,482 crore in the Indian equity market in March after investing Rs 25,787 million in February, Rs 19,472 crore in January and Rs 1.7 lakh crore throughout 2020

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