Mutual Funds See Biggest Outflow Since IL&FS Crisis, Equity Schemes Defy Uncertainty
Investments into equity mutual funds jumped in March, defying the Covid-19 volatility and the biggest outflow across categories since the IL&FS crisis.
Net outflow across all segments of schemes stood of Rs 2.12 lakh crore compared with an outflow of Rs 1,986 crore in February, according data released by the Association of Mutual Funds in India. That’s the biggest decline since September 2018 when defaults by IL&FS group had triggered exodus from debt schemes.
Net investments into equity and equity-linked schemes, however, rose 8.58 percent over the previous month to Rs 11,723 crore in March.
Equity funds defied the worst-ever monthly decline of 23 percent in the S&P BSE Sensex and the NSE Nifty 50 in March as the Covid-19 outbreak stalled economic activity and India went into a 21-day lockdown.
Inflows into equity multi-cap funds rose 40 percent month-on-month to Rs 2,268 crore, while they jumped 28 percent to Rs 2,061 crore for large-cap funds, according to granular data that AMFI started releasing since April 2019. Net investments in small and mid-cap funds, however, fell.
Contribution through systematic investment plans, however, remained steady at Rs 8,641 crore in March. SIP monthly contributions remained above the Rs 8,000-crore mark for 16 straight months.
Investors pulled out a net Rs 1.1 lakh crore from liquid funds against an outflow of Rs 43,825 crore in February. This is the biggest outflow from the category since Rs 1.4 lakh crore in September 2019. Such schemes are used by companies to park short-term cash and usually see a spike in redemption at the end of a quarter.
Total assets under management fell 12.7 percent month-on-month to Rs 24.7 lakh crore in March. Total equity assets dropped 18.2 percent to Rs 6.5 lakh crore during the period.