Inflows into equity mutual funds decline 68% in April

Compared to March, various equity schemes, including multi-cap funds, large-cap funds, mid-cap funds and small cap funds, witnessed slower inflows.

The data showed that inflows into debt mutual funds increased in April, despite the government announcement to withdraw the indexation benefit for calculation of long-term capital gains (LTCG). (Representational/file)

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Net inflows into equity mutual funds declined by 68 per cent to Rs 6,480.29 crore in April 2023 compared to Rs 20,534.21 crore in the March, according to data released by the Association of Mutual Funds in India (AMFI).

The flows into equity schemes were affected due to volatile stock markets and also on account of fewer working days in April, said AMFI’s Chief Executive N S Venkatesh.

Compared to March, various equity schemes, including multi-cap funds, large-cap funds, mid-cap funds and small cap funds, witnessed slower inflows. Inflows into mid-cap funds stood at Rs 1,790.98 crore in April as against Rs 2,128.93 crore in March. Small-cap funds saw inflows of Rs 2,182.4 crore compared to Rs 2,430.04 crore. Inflows into large- and mid-cap funds stood at Rs 738.71 crore in April as against Rs 1,618.86 crore in March.

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Focused funds, however, saw outflows of Rs 130.91 crore as against inflows of Rs 247.25 crore in the previous month.

Inflows into debt schemes stood at Rs 1.06 lakh crore in April compared to outflows of Rs 56,884.13 crore in March 2023.

“All debt-oriented schemes have shown positive numbers. Despite the tax impact, there has not been any outflows but there have been inflows across the spectrum of debt funds. People believe that interest rates have peaked, and so, they will like to continue with higher yielding instruments,” Venkatesh added.

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After hiking for six times, the Reserve Bank of India (RBI), in a surprise move, paused the hike in the repo rate at 6.5 per cent in its April 2023 policy. Many experts believe that the RBI is likely to remain on hold till the end of 2023.

Overnight funds, liquid funds and money market funds saw inflows of Rs 6,107.35 crore, Rs 63,219.33 crore and Rs 13,960.96 crore, respectively, in April.

Venkatesh said inflows were high as corporates and banks invest in these funds as part of their treasury management. The higher inflows into these funds cannot be taken as a trend, he noted.

Net assets under management as on April 30, 2023 stood at Rs 41.61 lakh crore compared to Rs 39.42 lakh crore as on March 31, 2023.

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During April, the SIP inflows stood at Rs 13,727.63 crore compared to Rs 14,276 crore.

Venkatesh attributed this dip in SIP inflows to more holidays in April and also as March saw higher inflows due to lesser number of working days in February.

The number of SIP accounts stood at 6.42 crore in April compared to 6.35 crore in March 2023.