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Investor caution visible as sectoral and thematic fund inflows drop
Sharp decline in sectoral and thematic fund inflows indicates rising investor caution amid valuation concerns, volatility, and uncertain global economic signals.
Inflow into sectoral and thematic mutual funds declined sharply by 49% to Rs 945 crore in December, signaling growing investor caution. Market experts attribute the slowdown to stretched valuations, increased volatility, and uncertainty around global economic cues. While long-term interest in thematic plays remains, investors appear to be rotating toward diversified and large cap strategies. Retail investors are shifting toward risk-adjusted strategies amid uncertainty.