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Rocky start for equities in H2FY25 puts focus on mutual fund flows

Charting course to calm: With record equity inflows of Rs 2.8 trillion in FY25, they provide the ballast that steadies the ship amid choppy FPI exits

Mutual funds (MFs) are gearing up with offerings centered on the ‘quality’ theme, as this investment approach is expected to rebound following three years of underperformance compared to the ‘value’ theme.
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Abhishek Kumar Mumbai

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With the domestic market off to a turbulent start in the second half of the financial year (2024-25/FY25), the trajectory of the market is expected to be determined by domestic institutional inflows, particularly from mutual funds (MFs).

In recent years, MFs have been a major support for the market, more than offsetting sharp bouts of foreign portfolio investor (FPI) selloffs. Benchmark indices have declined nearly 5 per cent in the past week amid a pullout of over Rs 30,000 crore by global funds. Experts suggest that the decline could have been worse without domestic liquidity support.

“The