Inflows Into Equity Mutual Funds Snap Four-Month Decline
Inflows into equity mutual funds rebounded in March after four straight months of decline.
Inflows into equity mutual funds snapped their four-month losing streak in March, tracking the rebound in the stock market.
Net investments into equity funds, including equity-linked savings schemes, more than doubled over the previous month to Rs 11,756 crore in March, according to data released by the Association of Mutual Funds in India.
India’s benchmark Nifty 50 surged about 7.7 percent in March as the market recovered from its February low.
Overall, the mutual fund industry witnessed a net outflow of Rs 22,357 crore, higher than Rs 20,083 crore that flowed out of all schemes put together in February.
The liquid or money-market category contributed the most to the outflow. Such schemes, used by companies to park short-term cash, saw withdrawals by investors for the second straight month. Investors pulled out Rs 51,343 crore last month, the most since December, against an outflow of Rs 24,509 crore in February.
Income funds saw an inflow of Rs 13,856 crore in March, the highest since October 2017. Such schemes are considered safer because they invest in high-dividend generating stocks, government securities, certificate of deposits, corporate bonds and money-market instruments.
Balanced funds saw withdrawals for the third straight month, the longest streak since May 2014, with an outflow of Rs 3,181 crore.
Total assets under management of the industry rose 3 percent month-on-month to Rs 23.79 lakh crore in March. Total equity assets jumped 8.6 percent to Rs 8.40 lakh crore during the period
“The mutual fund industry, in one of the most difficult and uncertain years—marked with acute market volatility, credit events and border tensions—has done exceedingly well, with overall industry growing 11 percent,” NS Venkatesh, chief executive at AMFI, said. “With interest rates easing and the impact of credit events almost normalised, and macroeconomic indicators showing healthy uptrend, the mutual fund industry is poised to grow at a robust 17-18 percent in 2019-20.”