‘Equity mutual fund inflows in April lower than expectations’

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Assets under management (AUM) in April have grown a little over Rs 32 lakh crore as per Association of Mutual Funds in India (AMFI) data which was released today.

The total assets inflow in the debt schemes on the other hand have crossed Rs 1 lakh crore mark. Overnight and Money Market funds have also done well, each getting in close to about Rs 20,000 crore of funds.

Equity Mutual Funds have continued to see inflows for the second month in a row, however, they have slipped sharply month-on-month.

Sharing his thought on this dip in equity mutual funds, Swaroop Mohanty, CEO, Mirae Asset Investment Managers told Money9, ” While overall that the data is quite positive as both debt and equity have done well…Equity mutual fund inflows have come in lower than my expectations”.

On the other hand, Kaustubh Belapurkar, Director – Manager Research, Morningstar Investment Adviser India said, “While the equity mutual fund flows have fallen month on month, one must note they are on the positive side for the second consecutive month after eight long months of outflows.”

He also added that the high number of redemptions seen during the October-December quarter have significantly come down which is a healthy sign.

Talking about the inflows in debt schemes, Mohanty said that funds have flown into the shorter end of the market including money market and liquid funds but on the longer end, investors seem to be jittery on the longer side on interest rates and which is why we have seen corporate bonds and Banks & PSU category seeing outflows.

On key positive takeaway on the SIP inflows, Mohanty said, “When we compare the previous crisis of 2008, where we had seen 60% of SIPs being stopped, during the entire pandemic, SIP investors have not only stayed put, but have been adding as well which shows the maturity of investors believing in the asset class. However, he said, this has not been the case with lumpsum investors.”

Sharing the same thought, Belapurkar said, “SIPs have been the bedrock of mutual fund investments. However, investors need to be aware that aligning investments with a long-term vision is key rather than thinking of short-term returns.”

For first-time investors, as to how to get started with mutual fund investments, Mohanty says, one must start by finding their goal, knowing their risk profile, get down to asset allocation and only then select the schemes for investments.”

Watch the entire conversation here