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.
While large-cap funds saw inflows for the first time in 10 months, mid-cap funds received net inflows the first time in nine months. Small-cap funds saw inflows after five months.
Multi-cap funds, however, saw outflows for the first time in three months, with investors pulling out close to Rs 200 crore in March.
AMFI started offering granular data since April 2019.
Contributions through systematic investment plans jumped to a record high of Rs 9,182 crore, according to Motilal Oswal.
Overall, the mutual fund industry across categories saw a net outflow of Rs 29,745.4 crore compared with an inflow of Rs 4,090 crore in February.
Liquid funds, used by companies to park short-term cash, have swung between inflows and outflows in the last seven months. Compared with a net investment of Rs 17,301 crore in February, they saw an outflow Rs 19,383 crore in March.
Credit risk funds continued to see outflows for the second straight month. January was the only month when this category saw positive flows in FY21. Investors withdrew a net Rs 169.7 crore in March from such schemes compared with an outflow of Rs 829.5 crore in February.
(Equity flow number for February updated as AMFI corrected the data.)