Investors switch to safe-haven funds

Flows into low-risk MFs up 70% sequentially as sentiment turns cautious

- ABHISHEK KUMAR

Mutual fund offerings that are believed to be safer investment options have witnessed marked surge in inflows, reflecta ing a shift in investor sentiment amid concerns over a potential global slowdown and elevated valuations in the midcap and smallcap segments.

RIS Largecap, flexicap, and balanced advantage funds together recorded a net inflow of ₹9,363 crore in August, representing a 70 per cent increase from the previous month's total.

"Equity valuations have risen sharply over the past four years, with midcap and smallcap stocks particularly seeing elevated levels. Investors are now looking for relative safety, which has led to increased inflows into largecap and balanced advantage funds," said D P Singh, deputy MD and joint CEO of SBI Mutual Fund, the country's largest asset management firm.

The Indian stock market faced turbulence during the early sessions of August, triggered by weaker-thanexpected US employment data, a rate hike by the Bank of Japan, and other global factors that contributed to significant corrections worldwide. However, the markets staged a sustained recovery in the latter half of the month.