Regardless of the volatility in the markets, the mutual fund investor continues to view growth (equity) funds favourably. This seems to underline a maturity in the industry.

The latest figures released by the Association of Mutual Funds in India (AMFI), as on 31st July 2000, indicate that (gross) inflows in existing growth funds continue to remain healthy at Rs 13.3 billion, which accounts for 25.7% of total inflows in all existing funds. Only liquid funds with Rs 17.5 bn (33.9% of inflows) were more popular. But given the very nature of liquid funds as a parking avenue for surplus funds, inflows will always be higher than in growth or income funds.

Existing income funds on the other hand, posted (gross) inflows of Rs 11.7 bn (22.6% of inflows). Of course, by adding the inflows of Rs 2.6 bn in ANZ Grindlays Personal Saver Fund, income funds mobilised (gross) inflows of Rs 14.2 bn.

Another point of some interest is the large scale redemptions witnessed in income funds of Rs 10.0 bn (25.5% of total outflows). Investors in growth funds proved slightly more faithful as inflows at Rs 9.6 bn accounted for 24.5% of outflows.

There were fears that volatility in the markets would prove to be the undoing of the growth fund investor and would result in an exodus. Those fears have been put to rest for the time being. Growth fund investors have chosen to remain invested, instead of rushing for the closest exit. Mutual funds are long-term investments, which implies that patience plays a very important role in reaping the fruits of investments.

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