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The losing streak has finally snapped. After eight straight months of net outflows, equity mutual funds saw net inflows of 9,115 crore in March. At the same time, debt funds saw outflows of 52,528 crore, after they got inflows of 1,735 crore in February, according to data issued Thursday by the Association of Mutual Funds in India.

So, does this mean retail investors have shifted favour back to equity funds? Such a conclusion may be premature. March figures tend to be influenced by year-end tax payments and portfolio rejigs, and these could explain some of the debt outflows. That equity-linked saving schemes were among the top performing categories among equity funds reinforces that possibility. To be sure, while tax saving schemes did well, inflows were decently spread among other equity categories, barring a few. Also, investments via systematic investment plans, or SIPs, hit a monthly high of 9,182 crore. Maybe all this is reflective of household income restoration after last year’s covid crunch. If so, it would be another aspect of ‘normalization’. Stock market indices have risen sharply in recent months. But it’s unclear how ‘normal’ these levels are.

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