Equity mutual fund (MF) schemes saw the highest-ever monthly inflows in two years as investors looked to invest at a time when most shares are available at highly beaten-down valuations even as the month saw overall industry outflows at the highest quantum since September 2018.
In March, the net inflow into equity schemes was pegged at ₹11,722.74 crore, as per data from the Association of Mutual Funds in India (AMFI). This was the highest monthly inflow since February 2018 when such schemes registered inflows of ₹14,683 crore.
Further, there was a rise in the number of SIP (systematic investment plans) folios as well in March.
The overall mobilisation via SIPs in 2019-20 was pegged at a little more than ₹1 lakh crore, higher than the previous fiscal’s ₹92,693 crore. This assumes significance as the benchmark Sensex lost a little over 23% in March — the highest monthly drop in more than 11 years.
“Instead of exiting their investment in equity funds, retail investors have not only held on, but added more assets and folios through SIPs,” said N. S. Venkatesh, chief executive, AMFI.
Debt schemes, however, saw massive outflows of almost ₹1.95 lakh crore, which was in line with most quarter-end trends on account of redemption pressures to meet advance tax payment requirements.
“Periodic advance tax payments are a reason for a rise in outflows in March every year, this year though, there are a few supplementary factors that have piled on,” said Tarun Birani, founder and chief executive officer, TBNG Capital Advisors, an investment advisory and wealth management firm.
“Equity inflow figures are a positive indication that investors continue to put faith in the long term in equities despite negative markets,” added Mr. Birani.
Meanwhile, the huge redemption pressure in debt funds led to an overall outflow of ₹2.13 lakh crore from the industry assets, the highest monthly outflow since September 2018 when the IL&FS crisis hit the market.
The total assets under management (AUM) of the mutual fund industry was pegged at ₹24.71 lakh crore in March..
