Equity fund inflows continue in April; bond schemes, Gold ETFs in demand

Investors reinforced their faith in the equity cult by investing in equity schemes of mutual funds in April 2021. Equity mutual funds saw net inflows (investments exceeding redemption) of Rs 3,437 crore in April, albeit much lower compared to Rs 9,115 crore in March 2021, according to data released by the Association of Mutual Funds in India (AMFI).

Among equity funds, sectoral or thematic schemes and mid cap scheme got inflows of Rs 1,705 crore and Rs 958 crore, respectively. Equity linked savings schemes – popularly known as tax saving funds have registered net outflows of Rs 136 crore. These schemes have received inflows of Rs 1,552 crore from investors keen on cutting their tax bill in March 2021 – the last month of the previous financial year.

Investors use systematic investment plans (SIP) to invest in mutual funds. Contribution through SIP stood at Rs 8,590 crore in April 2021 compared to Rs 9,182 crore in March. Number of SIP accounts outstanding registered at 3.79 crore in April compared to 3.72 crore in March 2021.

Bond funds saw net inflows of over Rs 1 lakh crore compared to outflows of Rs 52,528 crore in March 2021. Liquid schemes, money market schemes and overnight schemes got inflows of Rs 41,507 crore, Rs 20,286 crore and Rs 18,492 crore, respectively. Short duration funds received net inflows of Rs 1,246 crore. However, dynamic bond funds and corporate bond funds saw net redemptions of Rs 2,103 crore and Rs 1,880 crore respectively. “High liquidity in financial markets has led to inflows in liquid and overnight funds where there is minimal risk,” says N S Venkatesh, Chief Executive, AMFI.

Hybrid funds got net inflows of Rs 8,641 crore compared to net inflows of Rs 6,210 crore in March 2021. Balanced advantage funds saw net investments of Rs 1,700 crore compared to Rs 2,711 crore in the previous month. Arbitrage funds got net inflows of Rs 7,245 crore in April 2021 compared to Rs 3,087 crore in the previous month. Hybrid funds invest in varying mix of stocks, bond and gold as per the mandate of the scheme.

Gold continued to remain on the investors’ radar. Gold ETF tracking gold prices attracted net investments of Rs 680 crore in April compared to Rs 662 crore in March.

Total assets under management for the mutual fund industry stood at Rs 32.37 lakh crore as on April 30, 2021, as compared to Rs 32.17 lakh crore as on March 31, 2021.