Indian equity markets surged in March, driven by strong global cues and fresh appetite for risk among investors. The strong rally in frontline stocks ensured that the Bombay Stock Exchange’s Sensex index returned over 9%. During the month, mutual funds invested Rs1,477 crore in equities, while foreign institutional investors deployed Rs530 crore.
Also See Major Gainers in March (PDF)
Large-cap diversified equity funds registered the highest return during March. The performance of these funds would have been better had they fully invested in equities during the month. Since most of these funds parked an average 20% of their portfolios in cash and cash-equivalent instruments because of conservative investment strategies, they were not able to take full advantage of the equities’ rally last month.
The equity-linked savings schemes (ELSS) received net inflows of Rs547 crore as investors flocked to these funds to save taxes as the end of the fiscal year approached.
Also See India Small/mid-cap (PDF)
New fund offers continued to receive sluggish response, owing to the overall negative mood about equities. For instance, IDFC Mutual Fund, which launched its open-ended equity scheme IDFC GDP Growth Fund, collected just Rs50 crore from the new fund offer that was open for nearly a month.