Volatile markets hit equity MF inflows

Investors pump in ₹81,600 cr. in schemes in 2019-20, a 27% drop from ₹1.2 lakh cr. in preceding fiscal

Fangs of fear: The markets witnessed extreme volatility amid concerns over the impact of COVID-19.

Investors pumped in ₹81,600 crore in equity-oriented mutual fund (MF) schemes in 2019-20, registering a decline of 27% from ₹1.12 lakh crore inflow in the preceding fiscal.

However, this was the sixth successive year of net inflows in equity mutual funds, according to data by the Association of Mutual Funds in India (AMFI).

Break from investment

The flows into equity funds in the last fiscal were lower than the flows in 2018-19 primarily due to the equity markets displaying volatility, which made some investors take a break from making fresh equity investments. According to the data, net inflows into equity funds, which also include equity-linked saving schemes (ELSS), were ₹81,600 crore in the last fiscal. as against ₹1,11,858 crore in 2018-19.

Net inflows in these funds were ₹1,71,069 crore in 2017-18, ₹70,367 crore in 2016-17, ₹74,024 crore in 2015-16, and ₹71,029 crore in 2014-15.

However, they had witnessed a net outflow of ₹9,269 crore in 2013-14.

Of the total inflow in the latest fiscal, investors poured ₹11,485 crore in March, which was the highest level in the year.

Also, they had invested ₹10,730 crore in February, the highest level in 11 months.

This comes even as the broader market witnessed extreme volatility amid concerns over the impact of the COVID-19 pandemic.

Himanshu Srivastava, senior analyst-manager research at Morningstar India, said extreme volatility in the stock markets on the back of the pandemic did not deter investors from investing into equity funds in February and March.

The assets under management (AUM) of equity MFs dropped to ₹6.03 lakh crore at the end of March 2020 as against ₹7.73 lakh crore in March 2019.

However, SIP (systematic investment plan) contribution to the industry surged to over ₹1 lakh crore from ₹92,693 crore in 2018-19. The industry, on an average, added 9.95 lakh SIP accounts each month during the last financial year, with an average ticket size of ₹2,750.

Mutual funds are investment vehicles made up of a pool of funds collected from a number of investors. The funds are invested in stocks, bonds and money market instruments, among others.