"Investor awareness programme and paperless investing platform for mutual fund investing are the two major factors that have facilitated this growth in net inflows. In addition to these, even the investors' confidence in MF has increased. Now, they are holding their investments in equity oriented schemes for a longer period of time for both lump sum as well as Systematic Investment Plan (SIP) investments," Bajaj Capital CEO Rahul Parikh said.
SIP is an investment vehicle that allows investors to invest in small amounts periodically instead of lump sums. The frequency of investment is usually weekly, monthly or quarterly.
According to data from the Association of Mutual Funds in India (Amfi), equity funds, which also include equity-linked saving schemes (ELSS), saw net inflows of Rs 10,790 crore in May, higher than Rs 9,429 crore in the preceding month.
The assets under management (AUM) of equity MFs scaled a record high of Rs 5.83 lakh crore at the end of May 2017 from Rs 5.69 lakh crore at the end of April.
MFs are investment vehicles made up of a pool of funds collected from a number of investors. The funds are invested in stocks, bonds and money market instruments, among others.
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