Stocks

In a 9-month first, equity MF flows turn positive in March

Suresh P Iyengar Mumbai | Updated on April 09, 2021

Get ₹9,115 cr as SIPs return; despite Covid, AUM of MFs up 32% in FY21, show AMFI data

Despite uncertainties due to the continuing Covid-19, inflows into equity mutual funds turned positive for the first time in the last nine months.

According to data released by the Association of Mutual Funds in India (AMFI), there was a net inflow of ₹9,115 crore into equity mutual funds in March compared to an outflow of ₹4,497 crore logged in the previous month on the back of a sharp jump in monthly systematic investment contribution.

All equity schemes recorded net inflows except for multi-cap funds, which saw an outflow of ₹192 crore. Sectoral and tax- saving schemes registered the highest inflows of ₹2,009 crore and ₹1,552 crore while mid-cap and flexi-cap mopped up ₹1,503 crore and ₹1,386 crore, respectively.

Investments through SIP

Investments through SIPs hit pre-Covid levels in March rising to ₹9,182 crore touched rising from ₹7,528 in February. The last two days of February being holidays, SIPs of about ₹500-600 crore logged on these days were accounted in March. New SIPs of 16.17 lakh opened in March suggested restart of suspended investments via this route.

Kaustubh Belapurkar, Director, Morningstar India, said, “It is too early to say if this trend is here to stay but it seems equity investors who were waiting on the sidelines for a market correction have started making allocations taking a long-term view on equities.”

Debt funds logged outflows of ₹52,528 crore as corporates and banks withdrew funds to meet their annual tax commitment.

 

Yearly trend

Gautam Kalia, Head (Investment Solutions), Sharekhan said, “There has been a significant redemption pressure on debt funds also from retail clients given the reduction in short term returns.”

Overall, the Assets Under Management (AUM) of mutual funds were down a tad at ₹31.42-lakh crore in March against ₹31.64-lakh crore in February. Despite the upheavals wrought by Covid-19 in the equity and debt markets , the AUM of mutual funds last fiscal increased 32 per cent from the ₹23.93-lakh crore logged in April 2020.

In the just ended fiscal year, SIPs had dropped four per cent at ₹96,080 crore against ₹1-lakh crore mopped up in 2019-20 as many investors paused their investments plans as Covid-19 hit salaries and even lead to job losses.

NS Venkatesh, Chief Executive, AMFI, said, “Investors who had stayed away from all the noise around and reposed faith in mutual funds have been rewarded...”

The AUM of ‘beyond top-30 cities’ increased 54 per cent to ₹5.35-lakh crore against ₹3.48-lakh crore logged in previous year.

Published on April 08, 2021

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