Comments on AMFI data by Nirav Karkera, Head of Research and Fund Manager, W by Groww
Below the Comments on AMFI data by Nirav Karkera, Head of Research and Fund Manager, W by Groww
Equity allocations are holding steady, even though mid and small caps have had a rough couple of months. So if the market falls further, it probably won’t be because mutual fund investors are pulling out. That pressure is more likely to come from foreign investors or weak earnings.
The story is different for fresh inflows. SIPs are contributing a meaningful share, while lumpsum investments are not quite rushing in right now. This implies that domestic money is cushioning the declines but may not be able to take markets meaningfully higher, at least not on its own.
What stands out is where the money is going. More investors are picking diversified funds and leaving the large, mid or small cap decision to the fund manager. The strong interest in small caps seems to be ebbing a bit. For the time being, bigger companies look better placed to lead.
Any slippage in SIP numbers going forward could be a valid cause for concern, though the probability seems low at the moment.
Silver is the one place where people are buying hard into a falling price. That looks more like a trade than an investment, and trades can reverse quickly. We remain cautious on the asset class.
In debt, as the flows reflect, money will likely gravitate towards funds at the shorter end of the curve until rates peak.
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