MF inflow dips 26%, SIPs hit 3-month low in Feb

Marking the second consecutive month of decline in inflow in equity funds, inflow in equity mutual funds dropped 26 per cent to Rs 29,303 crore in February, according to data released by the Association of Mutual Funds in India (AMFI) on Wednesday.

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This comes amid continued market volatility, primarily due to a significant decline in investments in small and midcap schemes, the experts said.

The development assumes significance as it comes in the backdrop of global uncertainties and macroeconomic factors, which led to a slump in benchmark index Sensex by 5.5 per cent in the month under review.

They said the latest fund infusion by investors also marks the 47th consecutive month of net inflows into the segment.

Similarly, inflows into systematic investment plans (SIP) came at Rs 25,999 crore in February, marking the three-month low. In January, SIP inflow was Rs 26,400 crore and Rs 26,459 crore in December, the data said.

Suranjana Borthakur, Head of Distribution & Strategic Alliances at Mirae Asset Investment Managers (India), said the SIP inflows have come down, but the drop was not significant, partly due to February being a shorter month as compared to January.

Equity-oriented mutual funds saw an inflow of Rs 29,303 crore in February, way lower than Rs 39,688 crore registered in January and Rs 41,156 crore in December, the AMFI figures revealed, while showing that the pace of investments moderated compared to the previous month due to increased market uncertainty and a broader correction in equities.

Nehal Meshram, Senior Analyst and Manager Research at Morningstar Investment Research India, said, “While short-term headwinds have tempered investment flows, domestic investor confidence remains strong, as indicated by continued inflows. Investors are adopting a cautious yet steady approach.”