Equity mutual funds maintain positive momentum for 14th straight month in April

New Delhi:

Equity mutual funds maintained their positive momentum for the 14th consecutive month, attracting a net Rs 15,890 crore in April amid heightened volatility in the stock market and continued selling by foreign portfolio investors.

The figure is much lower compared to the record net inflow of Rs 28,463 crore last month, data from the Association of Mutual Funds of India (AMFI) showed on Tuesday.

According to Himanshu Srivastava, associate director and research manager at Morningstar India, the lower net inflows last month may have been due to slightly cautious investors, given the ongoing challenges in the investment environment.

Akhil Chaturvedi, chief commercial officer at Motilal Oswal AMC, said it would be interesting to see continued investment trends given the very high intensity of volatility, but the positive trend is expected to continue moving forward.

Underscoring the positive investor sentiment, equity plans have been seeing net inflows since March 2021 following a market correction caused by a second wave of COVID-19.

Before that, such schemes had been experiencing outflows of Rs 46,791 crore in the eight months from July 2020 to February 2021.

All equity-oriented categories saw net inflows in April, with the sectoral/thematic fund category being the biggest beneficiary with a net inflow of Rs 3,843 crore. The division has also launched a new fund, the ICICI Prudential Housing Opportunities Fund, which has raised core funding of Rs 3,130.

This was followed by large and mid-cap funds with net infusions of over Rs 2,000 crore.

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“Despite market volatility and global and local macroeconomic concerns, it is a good trend to see continued positive equity flows. While lower than last month, possibly due to NFO allocations, SIP flows remain strong, which is also very Positive,” Chaturvedi said.

Monthly SIP (​​ Investment Plan) contribution fell to Rs 11,863 crore in April compared to Rs 12,328 crore in March.

However, the number of SIP accounts reached an all-time high of 53.9 million in April. During the month under review, 1.129 million SIP accounts were added.

Excluding equities, the debt sector recorded a net inflow of Rs 69,883 crore in April after a net outflow of Rs 1.5 crore last month.

In addition, there was a net inflow of Rs 11 billion in gold ETFs this month.

Overall, the mutual fund industry recorded a net inflow of Rs 72,846 crore last month compared to a net outflow of Rs 69,883 crore in March.

“It’s been a good start to the new fiscal year (FY23) with positive net flows across mutual fund schemes and 12 consecutive months of positive equities. Despite market volatility in April 2022, retail investor sentiment towards the mutual fund asset class has been positive. Trust to be strong,” said AMFI CEO NS Venkatesh.

The inflows pushed the sector’s average assets under management to an all-time high of Rs 3,889 crore at the end of April from Rs 37.7 crore at the end of March.

Going forward, mutual fund investors will continue to a SIP investment model in equities and reallocate more of their savings in debt funds to shorter-duration schemes, due to the recent rate hike by the Reserve of India, said.

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