Equity Mutual Funds See First Inflow In Nine Months In March

Equity mutual funds witnessed their first net inflow in nine months in March even as benchmark indices remain flat after scaling record peaks in February.

Investors pumped in a net Rs 9,115.1 crore into equity and equity-linked schemes in March compared with an outflow of Rs 4,534.3 crore in February, according to data released by the Association of Mutual Funds in India. This was the first inflow after eight straight months of outflows from such schemes.

Still, FY21 ended with a net outflow of Rs 25,245.95 crore from equity schemes against an inflow of Rs 83,788 crore in the previous fiscal. That came as Indians withdrew more funds in a pandemic-ravaged year that caused jobs and salary cuts, and business losses. Investors also booked profit as equities surged to record highs after an unprecedented rebound from March 2020 lows.

Equity mutual funds saw their first monthly inflow since June of last year. The month of March saw investor sentiment being kept under check owing to rising coronavirus cases across the country, particularly in Maharashtra, resulting in many localised lockdowns. The Nifty 50 index gained 1.1% in the month of March. Analysts too are starting to point to multiple headwinds grappling the equity markets, citing an unfavourable risk-reward ratio at current levels.