Equity fund inflows fall 16% to Rs 18,917 crore in April, SIP book tops Rs 20,000 crore for first time

Inflows into open-ended equity mutual funds had slumped 16 percent to Rs 22,633 crore in March.

Equity mutual fund inflows fell 16.42 percent to Rs 18,917.08 crore during April on a fresh slump in investments into large-cap funds, according to the data released by the Association of Mutual Funds of India (AMFI), the industry trade body for mutual funds on May 9.

Notably, small-cap funds saw inflows to the tune of Rs 2,208.70 crore during April after witnessing small outflows during March.

For the first time ever, monthly investments via systematic investment plans (SIPs) topped the Rs 20,000 crore landmark to reach a total of Rs 20,371 crore during April.

As per AMFI data, SIP book was at Rs 19,271 crore in March against Rs 19,187 crore in February 2024.

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Venkat Chalasani, Chief Executive, AMFI said, “The mutual fund Industry surged to new levels, with net AUM reaching Rs 57.26 lakh crore and SIP accounts touching 8.70 crore. A historic SIP contribution of Rs 20,371.47 crores taking SIP AUM to Rs 11.26 lakh crore with 63.65 lakh new SIP registrations showcases investor confidence.”

Following a significant outflow of Rs.1.59 lakh crore in March, the mutual fund industry experienced a strong rebound with net inflows reaching Rs 2.39 lakh crore, driven by inflows across all categories.

Equity segment

Meanwhile, inflows into open-ended equity funds have remained in the positive zone for the 38th straight month.

Inflows into large-cap funds slumped 83 percent to Rs 358 crore in April, while mid-cap funds saw 76.19 percent jump in net investments to Rs 1,793 crore.

Small-cap funds, which had seen outflows for the first time in 30 months in March, were back in the green with net inflows of Rs 2,209 crore.

Sectoral and thematic funds saw the highest inflows in the equity fund category at Rs 5,166 crore. However, inflows in the segment fell 34.75 percent during the month.

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On the other hand, Focused Fund and tax-saving Equity Linked Savings Scheme (ELSS) categories saw net outflows of Rs 328 crore and Rs 144 crore, respectively.

There were apprehensions that mutual fund inflows might take a hit as investors and distributors were bogged down by new Know-Your-Customer (KYC) rules that limit first-time investments in fund houses unless the KYC status is ‘validated.’

“India’s mutual fund industry has reached yet another milestone with the SIP book crossing above Rs 20,000 crore in April 2024. It shows the mutual fund industry has received higher acceptance from investors to invest their savings and create wealth in the long-term via the SIP route,” said A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC.

Debt funds

Meanwhile, debt funds, which had witnessed net outflows of Rs 1,98 lakh crore during March saw net investments of Rs 1.90 lakh crore during the last month.

Major net investments to the tune of Rs 1.03 lakh crore were seen in the Liquid Fund category, followed by net inflows of Rs 34,084 crore in the Money Market Fund segment.

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In the fixed-income category, small outflows were seen in Medium Duration Fund and Banking and PSU Fund categories.

"This surge in inflows can be attributed to factors such as quarter-end demands for advance tax, diminishing year-end redemptions, and continued volatility in the stock markets, leading investors to favour cash for short-term investments," said Gopal Kavalireddi, Vice President of Research at FYERS.

Riding the fresh inflows in debt funds and equity funds, the assets under management (AUM) of the mutual fund industry reached Rs 57.26 lakh crore at the end of April 2024.