Mutual funds have invested just Rs 1,230 crore in stock markets during the lockdown and industry experts believe they are still waiting for a good “entry point” and maintaining high liquidity for any possible redemptions by corporate houses.
Going ahead, the primary factor that will determine mutual fund (MF) investment into equity will be their own inflows from investors. This will be put to test as many retail investors are facing risk of pay cuts and job loss over the next quarter or so, said Vidya Bala, co-founder of Primeinvestor.In Overall, mutual funds have made a net investment of Rs 1,230 crore in stocks since the nationwide lockdown was announced on March 24 to tackle the coronavirus, latest data available with the Securities and Exchange Board of India showed.
MFs invested Rs 6,363 crore in stocks in the last week of March, while they pulled out Rs 7,965 crore in April. Reversing the selling trend in May, they put in Rs 2,832 crore, the data showed. Amit Jain, co-founder and CEO at Ashika Wealth Advisors, said mutual funds are not investing big amounts in equities as they are waiting for a good entry point, which he believes will come within two months.