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MUMBAI : Net inflows into equity mutual fund schemes stayed robust in November with flows through systematic investment plans (SIPs) surging to a record high during the month despite a sharp correction in the market because of uncertainty that has come as a result of the new coronavirus variant.

Equity mutual fund schemes received net inflows of Rs10,686.77 crore in November, a four-month high, showed data issued by the Association of Mutual Funds in India (Amfi) on Thursday. The figure is more than double the net inflows of Rs5,079.16 crore in October. Monthly SIP contributions hit a new high of Rs11,004.94 crore in November compared to Rs10,518.53 crore in the previous month.

Correction in the equity markets provided investors a good investment opportunity, said Himanshu Srivastava, associate director, manager research, Morningstar India. Most of the investors found the correction in the market to be a good entry point and many preferred to stay invested, which is evident from the low redemption numbers, he said.

“Despite concerns over the Omicron variant of the coronavirus, the growth outlook over the long-term remains strong. Also, the perception that despite intermittent corrections, the markets would continue to surge would have prompted many investors to make the most of the recent dip," he said.

Markets had succumbed to sharp sell-offs towards the end of November with benchmark indices Sensex and Nifty losing nearly 4% during the month. By the end of November, Nifty lost 8% from the record highs hit in October. Most of the market anxiety was because of global factors such as the US Federal Reserve’s taper announcement, rising bond yields, higher crude oil prices and strengthening of the US dollar index. However, domestic institutional investors (DIIs), including mutual funds, insurance companies, banks and pension funds, pumped in 30,522.02 crore in November, the highest in 2021.

“The markets saw a sharp fall for a few days around the end of the month, but it has recovered swiftly. The inflows into equity schemes were equal to the SIP book last month, signifying that investors are staying committed to a disciplined mode of investing and are not taking hasty decisions with short-term market corrections. Further, markets are forward looking and with the past experience of market correction and sharp bounce back, investors now understand that they should look at the long-term economic growth story," said D.P. Singh, chief business officer, SBI Mutual Fund.

Net inflows into five categories of open-ended schemes, income/debt oriented schemes, growth/equity oriented schemes, hybrid schemes, solution oriented schemes and other open-ended schemes including index schemes, exchange traded funds, fund of funds schemes, have reported positive flows last month, according to Amfi.

“Despite rising uncertainty because of the feared third wave of the pandemic and extreme equity market volatility, retail investors continue to benefit and hence also stick to displaying trust on the disciplined SIP mode of savings in mutual funds. On the back of accommodative RBI policy stance, with focus on economic revival and growth and keeping inflation within target, we expect the MF industry to continue to report robust growth and deliver value to its investors in the years to come," said N.S. Venkatesh, CEO, Amfi.

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