According to Amfi, against a net outflow of Rs50,752 crore in March, April saw inflows of Rs1.37 trillion into mutual funds
Mumbai: Mutual funds received the highest inflows in the last 12 months in April, industry data showed, recovering sharply from the fall in March.
According to the Association of Mutual Funds in India (Amfi), against a net outflow of Rs50,752 crore in March, April saw inflows of Rs1.37 trillion.
Net inflows into equity MF schemes in April rose 86.40% to Rs12,409 crore, from Rs6,657 crore in March. Investors had pumped in Rs9,429 crore in equity mutual fund schemes in April last year, Amfi data showed.
Kaustubh Belapurkar, director of fund research at Morningstar Investment Adviser (India), said this is standard trend as inflows taper down in March due to financial year-end pressures of taxation and investors also adjust their portfolio before beginning of a new year. Investors may also have partially booked profits in March to avoid long-term capital gains tax (LTCG). Profits exceeding Rs1 lakh a year made by selling listing shares after 31 March will attract tax of 10%, which was earlier nil.
“Inflows into equity mutual fund schemes returned in April as expected and are estimated to stay robust. Money through the systematic investment plan (SIP) is likely to see strong flows," said Belapurkar.
Assets under management (AUM) of all mutual fund schemes was at Rs23.25 trillion in April up from Rs21.36 trillion in March. AUM for equity mutual fund schemes was Rs8 trillion, up from Rs7.49 trillion in March.
According to Sachin Shah, fund (portfolio) manager, Emkay Global Financial Services Ltd, the monthly inflow trend is encouraging and indicates that it is going to stay robust going forward. “Inflows into equity mutual fund schemes may have dipped in March but liquidity is expected to stay healthy. Financialisation of savings has moved a lot of physical money into mutual funds and India is still a under-penetrated market," he added.
Continued support from the domestic institutional investors (DIIs) including mutual funds and insurance firms cushioned outflow of foreign institutional investors (FII) in April, taking the stock markets higher by 6.65% in the month. In March and February, Sensex was down 4.95% and 3.56%, respectively. In April, DIIs had pumped in Rs8,511 crore in Indian equities while FIIs sold shares worth $943.32 million. In May so far, FIIs have sold Indian equities worth $301.86% and in contrast, DIIs have bought Rs1,708.24 crore.