Investors come back to equity mutual funds after eight months, shows AMFI data

Equity mutual funds saw net inflows (investments exceeding redemption) of Rs 9,115 crore in March 2021. Net inflows in equity schemes are seen after eight consecutive months.

Among equity funds, sectoral funds and equity-linked saving schemes (ELSS) popularly known as tax-saving mutual funds got inflows of Rs 2,009 crore and Rs 1,552 crore, respectively, as per data released by Association of Mutual Funds in India (AMFI). These categories saw highest inflows in March among equity funds. Inflows in ELSS were on the expected lines, as towards the end of financial year, many individuals prefer to invest in them to save tax.

“While it’s too early to make any conclusions, it seems like equity investors waiting on the sidelines for a market correction, have started making allocations taking a long-term investing view on equities, as should be the case. Additionally the quantum of redemptions were lower for the month, suggesting profit booking/reallocation to other asset classes slowed down,” says Kaustubh Belapurkar, Director – Manager Research, Morningstar India.

Investors reinforced their faith in systematic investment plans (SIP), which are primarily used to invest in equity funds. Contribution through SIP went up to Rs 9,182 crore in March compared to Rs 7,528 crore in February 2021.
Number of SIP accounts outstanding increased to 3.72 crore in March compared to 3.62 crore in February.