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Equity Mutual Fund Inflows Jump 44% In March: AMFI Data

Net inflows into equity and equity-linked schemes increased 44% over the previous month to Rs 28,463.5 crore in March.

<div class="paragraphs"><p>Indian two thousand and five hundred rupee banknotes are arranged for a photograph. (Photographer: Dhiraj Singh/Bloomberg)</p></div>
Indian two thousand and five hundred rupee banknotes are arranged for a photograph. (Photographer: Dhiraj Singh/Bloomberg)

Inflows into equity mutual funds jumped to the highest in at least four years, tracking a rebound in India’s stock market as crude stabilised and foreign selling slowed even as risks due to the ongoing geopolitical crisis persist.

Net inflows into equity and equity-linked schemes increased 44% over the previous month to Rs 28,463.5 crore in March, according to data released by the Association of Mutual Funds in India.

That’s the thirteenth straight month of investments into such stock plans, and the highest since at least April 2018 when AMFI revised reporting format.

Indian equity benchmarks bounced back in March, gaining 5.2% after falling as much as 4.4% in February.

Category-Wise Trends

All segments witnessed inflows in March.

Multi-cap funds witnessed the highest investments among all categories, while small caps saw the least.

Large and mid caps saw the biggest inflows since AMFI started reported granular data in April 2019.

SIP Contribution

Monthly contributions into systematic investment plans recovered to hit an all-time high of Rs 12,327.9 crore. This is the first time contributions have crossed Rs 12,000 crore.

SIP AUM also rebounded to the January level at Rs 5.76 lakh crore, after falling to Rs 5.49 lakh crore in February.

NS Venkatesh, chief executive officer at AMFI, in a conference call said the net outflow of more than Rs 69,000 crore from all mutual funds was “on expected lines” because of March being the last month of the fiscal. “With the quarter and fiscal ending, corporates take out money for advance tax payments.”

On the yearly performance, Venkatesh said the industry has grown a “healthy 20% year-on-year”. “Folios have grown 32%, while retail AUM has grown 38%. Retail investors have continued to repose faith in mutual funds as an investment vehicle despite some volatility even in March.”

Debt Funds

Liquid funds witnessed outflows after a month. Such schemes are used by companies to park short-term cash and usually see a spike in redemption at the end of a quarter.

Investors also pulled out from overnight funds during the month.

Credit risk funds witnessed outflows for the fourth straight month.

Net Flows

All mutual fund schemes, debt and equity, saw a net outflow—the biggest since March 2020 when the Covid-19 pandemic struck.

Average under management stood at Rs 37.7 lakh crore compared with Rs 38.56 lakh crore in February. Net AUM remained flat at Rs 37.56 lakh crore.