According to a report in a leading financial daily, net inflows in October 1999 accounted for 26.5% of net inflows in all schemes.

In September 1999, net inflows in equity schemes constituted 14.3% of total inflows. In October, assets invested in equity schemes amounted to Rs 420 bn. This accounts for 48.3% of total assets under management in the mutual fund (MF) industry.

Higher inflows in equity schemes signals increased participation of retail investors in equities. Investors who are unable to participate in the stock market boom due to the high stock prices find MFs a convenient and affordable mode of investment. Over the past few months, quite a few MFs have been very innovative in exploiting the frenzy raging in some sectors (software, pharma, consumer products) and have launched dedicated sectoral funds. This has increased inflows in equity schemes manifold.

Fund managers have adopted flexible investment strategies to reflect the mood in the stock markets. For instance, when consumer products-related stocks were not faring too well vis-à-vis economy-related stocks (cement, metals), fund managers were quick to reflect that in their investments. This kind of a quick decision-making has ensured that equity funds post increasing returns, thereby attracting higher inflows on the back of increased investor confidence.

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