The Shift in Investment Trends: Gold Surpasses Equity in Inflows
In January, equity mutual funds saw a 14% drop in net inflows, reaching Rs 24,028 crore, amid weak market conditions and geopolitical concerns. Meanwhile, gold ETFs surged with Rs 24,040 crore inflows. Steady SIP contributions helped maintain investor confidence in equities, despite a cooled mid and small-cap segment momentum.
- Country:
- India
In January, net inflows into equity mutual funds plummeted by 14%, amounting to Rs 24,028 crore, amid a backdrop of stagnant market conditions and geopolitical uncertainties. This marks the second consecutive month of waning inflows into the equity sector. Swapnil Aggarwal, Director at VSRK Capital, indicated investor money is shifting towards commodities.
A significant rise in gold exchange-traded funds (ETFs) overshadowed the equity market with inflows hitting Rs 24,040 crore, doubling from the previous month, as investors sought refuge amidst increasing geopolitical risks. This unprecedented shift marks the first occasion where gold ETFs outpaced equity mutual funds in inflows.
Despite the dip in equity investments, investor confidence remains buoyed by stable systematic investment plan (SIP) contributions. Nevertheless, the cooling momentum in mid and small-cap equity segments reflects cautious investor sentiment. However, industry experts anticipate a gradual recovery in equity inflows, bolstered by reasonable valuations and stabilizing market conditions.
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