MF flows in April: Equity Funds see 50th straight month of inflows; SIPs hit new record high

During the month, SIP flows hit an all-time high of Rs 26,632 crore though the stoppage ration also touched nearly 300%. The number of contributing SIP accounts climbed to 8.38 crore, from 8.11 crore in March,

The total assets under management (AUM) of the mutual fund industry rose 6.47 percent to Rs 69.99 lakh crore in April, driven by flows across debt-oriented schemes, equity schemes and mark-to-market movements.

While SIP net inflows hit a new all-time high of Rs 26,632 crore, a total of seven schemes were launched during the month across all open-ended and across categories, raising a total of Rs 350 crore.

Here are some of the key highlights from the April numbers.

SIP flows continue but stoppage ratio still a concern

During the month, SIP flows hit an all-time high of Rs 26,632 crore though the stoppage ration also touched nearly 300%. The number of contributing SIP accounts climbed to 8.38 crore, from 8.11 crore in March, even as around 1.36 crore accounts were stopped or matured during the month while around 46 lakh new SIP accounts were registered. According to AMFI’s Venkat Chalasani, higher net SIP account stoppage, which was a result of a reconciliation process undertaken by Registrar and Transfer Agent (RTAs) and exchanges, will come down in May, as the process ended in April.

Also read: SIPs gain ground: Monthly inflows hit fresh all-time high of Rs 26,632 crore in April

Arbitrage funds lead hybrid category

April saw hybrid funds category AUM growing 3.55 percent to Rs 9.14 lakh crore, led by strong inflows of Rs 14,248 crore. Within this segment, arbitrage funds were the best performing with record inflows of Rs 11,790 crore. Arbitrage funds are seeing increased interest amid current market volatility and favourable conditions.

“When I think about arbitrage funds, it benefits more when the market is volatile. Even now, the futures are trading at a premium, and the spreads have widened. I think the returns on the arbitrage fund would be higher (going ahead),”said Nehal Meshram, Research Analyst at Morningstar India explained.

Equity Funds see 50th straight month of inflows

Equity mutual funds saw inflows of around Rs 24,269 crore for the month, taking the equity AUM to Rs 30.58 lakh crore, a 3.81 percent month-on-month increase. Within the equity segment, flexi-cap funds recorded the highest inflows at Rs 5,542 crore for the second consecutive month. On the other hand, Small-cap funds attracted Rs 4,000 crore, while mid-cap and large-cap funds saw inflows of around Rs 3,314 crore and Rs 2,671 crore, respectively. While most of the funds saw a decline in inflows, large cap funds saw a month-on-month increase of around 8 percent.

Suranjana Borthakur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India) says, “It's encouraging to see an uptick in large-cap flows, which aligns with the current market environment. For long-term portfolios, we continue to believe that mid- and small-cap allocations are essential for wealth creation”.

Sectoral and thematic funds see momentum

For April net inflows of Rs 2,001 crore took the category’s AUM to Rs 4.70 lakh crore. In March, the segment saw inflows of around Rs 170 crore. Borthukar added that it was also encouraging to see that sectoral funds witnessed a strong recovery — not driven by new NFOs, but by genuine investor interest.

ETFs continue to shine

During the month, passive investments also saw strong inflows. The ETF category attracted its highest-ever monthly inflow of Rs 20,299 crore, with non-gold ETFs contributing Rs 19,056 crore. Total ETF AUM rose to Rs 11.91 lakh crore, up 3.9 percent month-on-month. During the month, Gold ETFs witnessed a net outflow of Rs 5.82 crore. However, Meshram notes that this was significantly better than March when the category witnessed a net outflow of Rs 77.21 crore.

“The reversal, though subdued in magnitude, suggests that the profit-bookinghase seen in March may have run its course, with some investors selectively re-entering positions in anticipation of continued global uncertainties and structural support for gold prices,” she added noting that the outflows in April have not been significant, reflecting underlying confidence in gold’s long-term value proposition.

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