Equity mutual funds witnessed inflows worth ₹15,890 crore in April despite heightened volatility in the stock market and consistent selling by foreign portfolio investors. However, this was down 44 percent from ₹28,463 crore inflows seen in March, data from the Association of Mutual Funds in India (AMFI) showed on Tuesday.
The decline in the mutual fund inflows can be attributed to the overall weak market sentiment on the back ok rising inflation, tightening monetary policy, China lockdown which could impact global growth, etc which kept the investors on the sidelines.
Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC said that it will be interesting to see ongoing investment trends, given the intensity of volatility is very high, and expect the positive trend to continue going forward though.
All the equity-oriented categories received net inflows in April with the sectoral/thematic funds category leading with a net inflow of ₹3,843 crore, a jump of over 1,100 percent from inflows worth just ₹307 crore in March.
It was followed by large and midcap fund category at ₹2,049.52 crore (versus ₹3,100 crore in March) and Smallcap fund category at ₹1,716.68 crore (vs ₹1,200 crore in March).
One must note that even though small-cap stocks have underperformed largecaps amid this volatility, investors have continued their investments in smallcap funds and withdrawn funds from the largecap and midcap fund category.
Flexicap funds, which has been the investors' one of favourite for the past few months have slipped to the fourth place in April, receiving inflows worth ₹1,708.75 crore in the month under review down from over ₹2,500 crore in March.
The segment also saw a launch of a new fund - ICICI Prudential Housing Opportunities Fund, which mobilised ₹3,130 core.
“Though lower than last month which may be due to NFO allotment, SIP flows are holding strong which is also very positive. It will be interesting to see ongoing investment trends given the intensity of volatility being very high, I do expect the positive trend to continue going forward though,” Chaturvedi of Motilal Oswal AMC added.
However, the monthly SIP (Systematic Investment Plan) contribution dropped to ₹11,863 crore in April compared to ₹12,328 crore in March. Still, the number of SIP accounts stood at an all-time high in April at 5.39 crore. In April, 11.29 lakh SIP accounts were added.
In the debt segment, net inflows worth ₹69,883 crore was seen in April after witnessing a net outflow of ₹1.5 lakh crore in the preceding month. Further, gold exchange-traded funds (ETFs) saw a net inflow of ₹1,100 crore in the month under review.
Overall, the mutual fund industry registered a net inflow of ₹72,846 crore last month as compared to a net withdrawal of ₹69,883 crore in March.
Equity schemes have been witnessing net inflow since March 2021, after the second wave of COVID-19 resulted in the correction in the markets, highlighting the positive sentiment among investors. Prior to this, such schemes had consistently witnessed outflows for eight months from July 2020 to February 2021, losing ₹46,791 crore.