The cumulative three-month rolling net investment by domestic mutual funds in the secondary equity market rose to ₹32,169 crore in August 2021, the highest since March 2020, data from Sebi showed. The figures include exposure to index funds, exchange traded funds (ETFs) and balanced funds. This offset the moderation in the inflow from foreign portfolio investors (FPIs) who had a rolling cumulative investment of ₹7,489 crore during the period, according to the NSDL data. The benchmark index Nifty 50 gained 10% in the past three months.
Local funds have been net buyers of equity in the secondary market in each of the past six months with a cumulative investment of around ₹42,944 crore. Inflow through systematic investment plans (SIPs) was ₹45,360 crore between March and July this year, reflecting no major lag between inflow and deployment.
The gross purchase by domestic funds was at ₹85,555 crore in August. The ratio of gross purchase and sale was 115% compared with the long-term average of 106%. Net investment of local funds in the secondary market was ₹10,295 crore in August. There are 18 instances since 2008 on a monthly basis when the net investment crossed ₹10,000 crore.
Total equity portfolio value of domestic funds rose by 52% year-on-year to ₹17.3 lakh crore in July following a sustained deployment and capital appreciation. Equity holding by local funds is 16.6% of the total institutional equity assets under management, the highest since June 2020, according to NSDL data.