Mumbai: Net inflows into domestic equity mutual funds more than doubled month-on-month from ₹5,122 crore in February to ₹11,756 crore in March, the highest since October 2018, according to data released by the Association of Mutual Funds of India (Amfi) on Monday.
Year-on-year, net inflows into equity MFs registered a sharp rise of 76.59%, compared to ₹6,657 crore in March 2018.
The month also witnessed the Indian markets rising nearly 8% to outperform its global peers, on expectations of a stable government at the centre after the April-May general elections.
According to N.S. Venkatesh, chief executive, Amfi, the spike in equity inflows is possibly due to the positive sentiments in the markets. “Volatility has come off a little and markets have shown a bit of an uptrend. This has rubbed off on mutual fund flows in March," said Venkatesh in a conference call.
Kaustubh Belapurkar, director, fund research, Morningstar Investment Adviser (India), said the latest Amfi data suggests investors are favouring equities. He expects equity inflows to stabilize in the coming months despite the rise in volatility as India goes to polls.
However, despite the rise in equity mutual fund inflow, overall domestic institutional investors’ (DII) investment in Indian shares was not positive. According to the BSE and NSDL data, DIIs, which include mutual funds and insurance companies, were net sellers of Indian shares worth ₹13,930.3 crore in March.
Redemption pressures from mutual fund equity schemes also increased to ₹15,890 crore from a month ago.
In February, redemption from such schemes was at ₹10,334 crore.
“The mutual funds industry, in one of the most difficult and uncertain years, marked with acute market volatility, credit events and border tensions, has done exceedingly well, with the overall industry growing by 11%, and retail by 14%. With interest rates easing and the impact of credit events almost normalized, and macro-economic indicators showing healthy uptrend, the MF industry is poised to grow at a robust 17-18% in 2019-20," added Venkatesh.
The total amount collected through systematic investment plans in March was ₹8,055.35 crore, against ₹8,094 crore in February, according to Association of Mutual Funds of India data.
Systematic investment plans allow people to invest a fixed amount in a mutual fund scheme periodically at fixed intervals.
“We have always seen an uptrend in SIP numbers. However, on a month-on-month basis the collections have fallen (in March), but that is very marginal. We do not see any slowdown in opening of systematic investment plans accounts. Three lakh fresh SIP accounts were opened in the month," said Venkatesh.