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.