As the equity market is showing no signs of recovery, mutual fund investors are shifting their focus from equity funds to debt funds.
“Investor focus is shifting from equity to debt funds because of the extreme volatile market conditions,” said AP Kurien, chairman, Association of Mutual Funds of India.
“It would take a few more months before the equity market starts looking up on a sustainable level.”
Adding that the new fund launches have been stalled for the time being as a result of the prevailing volatile conditions, Kurien said, “New funds are there, but people are not launching them because of (prevailing) market conditions.”
Investors flocked to debt and liquid funds of mutual fund houses in the month of January, helping the mutual fund industry gain 9.4 per cent in its total assets under management.
Investors gain in a context of rising interest rates, but with inflation under control and liquidity high, their prospects are less exciting, but fixed-income instruments like bonds are considered safe havens when the market is volatile.