In 2024, mutual funds would invest Rs 1.3 lakh crore in stocks due to the robust market performance.

MFs made investments of Rs 20,155 crore in April and Rs 26,038 crore in the first two weeks of the current month. Furthermore, with a net investment of Rs 44,233 crore, March saw the most MF purchase for 2024.

This year, mutual funds (MFs) have poured almost Rs 1.3 lakh crore into Indian equities, demonstrating their strong faith in the country’s stock market, which is mostly due to the high level of demand from ordinary investors.

According to Tradejini COO Trivesh D, mutual funds, which look after local investors’ long-term wealth, highlight the Indian market’s fundamental development potential and are less impacted by transient events like elections, so investors can keep buying equities.

Furthermore, he noted that investors who would normally prefer to avoid the markets are becoming more interested in systematic investment plans (SIPs) as a result of the remarkable compounding stories shared by industry veterans and influencers.

Mutual funds invested Rs 26,038 crore in the first two weeks of this month and Rs 20,155 crore in April, according to data from the Securities and Exchange Board of India (Sebi). In addition, the largest MF buy of 2024 took place in March, with a net investment of Rs 44,233 crore.

They also made investments of Rs 23,010 crore in January and Rs 14,295 crore in February.

The most recent data indicates that mutual fund stock investments may surpass Rs 1.3 lakh crore in 2024 (until May 16th).

Foreign portfolio investors (FPIs), on the other hand, have been taking money out of the stock market, having taken out over Rs 25,000 crore so far this year due to profit-booking, a volatile global environment, and uncertainty over rate cuts.

This is encouraging for the Indian markets because it shows how retail investors and DIIs, particularly mutual funds, are becoming more and more independent of foreign capital to maintain market stability.

Over the past few years, the equity markets have been sustained by this consistent inflow of capital from mutual funds and other domestic institutional investors (DIIs).

Investor interest has been piqued by the Indian stock markets’ generally good trend, notwithstanding occasional difficulties.

Since equity has been among the asset types with the strongest returns in recent years, mutual funds, which are seeing strong inflows from local investors, according to Morningstar Investment Research India Associate Director Manager Research Himanshu Srivastava.

According to him, local markets remain the most accessible investment choice for domestic investors, which is why they keep making investments in them.

“The fundamentals of the Indian market are still strong. For FY25, the GDP is expected to increase at a consistent 7% annual rate, while the budget deficit has dropped to 5.8%, the lowest level in five years.

Furthermore, according to Feroze Azeez, Deputy CEO of Anand Rathi Wealth Ltd., the consistent rise in SIP contributions—which hit a record high of Rs 20,371 crore in April 2024—indicates that investors are growing more disciplined and assured in the market.

Sector-wise, mutual funds have the highest exposure to IT and pharmaceuticals, then financial services. In addition, over the past year, mutual funds have increased their investments in power, vehicles, construction, and pharmaceuticals.

It’s interesting to note that, thanks to net inflows of Rs 81,539 crore during the quarter, mutual funds’ ownership of NSE-listed companies hit an all-time high of 8.92 percent in the three months that ended in March 2024. In contrast, 8.81 percent of assets were held in mutual funds as of the end of the December 2023 quarter, according to primeinfobase.Com, a Prime Database project.

However, the percentage of FPIs fell from 18.19 percent in December 2023 to a record low of 17.68 percent in March 2024, an 11-year low.

In the future, the outlook for investing with mutual funds in stocks have a lot of promise. Mutual funds are becoming more popular among investors as opposed to more conventional asset classes like debt, which still account for the largest portion of household allocations in India. According to Azeez, this trend is anticipated to continue, with mutual funds becoming as the main vehicle for equity investments.

Account opning link:

1. Groww Account- https://app.groww.in/v3cO/kyrp1zph
2. Kotak neo Account https://kotaksecurities.ref-r.com/c/i/32531/109103906