Domestic funds keep the tempo high in November with record net deployment in equities

Domestic funds keep the tempo high in November with record net deployment in equities

A strong inflow from the domestic funds was partially able to offset the risk-off selling by foreign funds in November amid the discovery of a new coronavirus variant. The domestic mutual funds were net buyers of Rs 24,270 crore worth of equities in the secondary market, the highest monthly inflow since March 2020, the data from SEBI showed.

The domestic monthly inflow has surpassed Rs 24,000 crore on only three occasions since 2005 when the data was first made available on the regulator’s website. The gross purchase to sales ratio of the local funds increased to 1.3 compared with the long-term average of 1.06. The six-month rolling gross purchase of the local funds rose to Rs 1 lakh crore in November 2021 for the first time ever and was about 55% of the gross purchase by foreign funds during the period.

A sustained flow through systematic investment planning (SIP) boosted the deployment of local funds. The monthly SIP inflow rose to a record Rs 10,518 crore in October 2021 taking total inflow to Rs 83,680 crore since April 2021.

The equity exposure of mutual funds in the secondary market includes equity funds, index funds, exchange traded and balanced funds.

The local funds have been net buyers of equities for the ninth month in a row with a cumulative net inflow of Rs 88,097 crore. Foreign funds on the other hand have been net sellers for five out of the nine months with a net outflow of Rs 483 crore during the period. Foreign funds sold Indian equities worth Rs 5,945 crore in November according to the NSDL data.

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