Mutual fund investors keep faith in SIPs despite market volatility

Inflows into equity mutual funds dropped to a four-month low of ₹6,108 crore in April amid uncertainty triggered by the COVID-19 crisis, Press Trust of India reported. The month of April witnessed a relief rally in the markets on the back of measures taken by the government and RBI to boost the domestic economy. Besides, selective relaxation in lockdown to kickstart economic activity too helped in improving the sentiments.

Consequently, S&P BSE Sensex surged by around 14% in April, to register the biggest monthly gain in many years.

Overall, the mutual fund industry witnessed a net inflow of ₹45,999 crore across all segments last month, data by the Association of Mutual Funds in India (Amfi) showed on Friday. The assets under management of the 44-player mutual fund industry stood at ₹23.93 lakh crore in April-end.

Inflows into equity and equity-linked open ended schemes stood at ₹6,213 crore, while an outflow of ₹105 crore was seen from close-ended funds, taking the net inflow to ₹6,108 crore.

Large-cap, multi-cap and ELSS (equity linked saving schemes) saw inflows of ₹1,691 crore, ₹1,240 crore and Rs 752 crore respectively during the month under review.

Investment through the systematic investment plan (SIP) route declined to ₹8,376 crore last month from ₹8,641 crore in March. However, the number of SIP accounts rose by 1.94 lakh to 3.14 crore.

The debt-oriented categories witnessed a net inflow of ₹43,432 crore in April. This was largely driven by a net inflow of Rs 68,848 crore in liquid funds.

Credit risk category, given its nature, was the worst hit with a net outflow of ₹19,239 crore during the month. This is among the highest ever monthly net outflows from this category. 

However, redemptions have slowed down substantially in credit risk funds because of special window of ₹50,000 crore provided by the RBI, AMFI had said earlier.

Besides, gold ETFs saw an inflow of ₹731 crore last month, after withdrawals of ₹195 crore in March. (With Agency Inputs)