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Sectoral or thematic funds received 50% of inflow (Rs 1,705.14 cr) in open-ended equity-oriented schemes.
Mutual funds investor continued with their investment into equity funds, however, the pace has slowed. As per data released by the Association of Mutual Funds in India (AMFI) open-ended equity mutual funds saw a net inflow of Rs 3,437.37 crore against the previous month’s Rs 9,115.12 crore.
Commenting on fund flow numbers Himanshu Srivastava, Associate Director – Manager Research, Morningstar India said that, “the volatility and intermittent corrections in the markets, on the back of concerns over the intense second wave of coronavirus pandemic and its possible impact on the economy, provided investors a good investment opportunity/entry points during the month.”
However, while the quantum of redemption was almost the same as last month, the fund mobilised was lower than that in March suggesting some of the investors would have preferred to stay on the sidelines until more clarity emerges around the impact of the second wave of the pandemic on the economy. Additionally, few investors would have also held back their investments in anticipation of market correction given the ongoing concerns, added Srivastava.
The surprising element in the monthly data was that sectoral or thematic funds received 50% of inflow (Rs 1,705.14 cr) in open-ended equity-oriented schemes. “Investor has taken the fancy of pharma related funds as they believe that due to the second wave pharma companies will outperform. This trend will continue for the next three-four months,” said N. S. Venkatesh, Chief Executive of AMFI.
The contributions under the systematic investment plan (SIP) were also encouraging as the month of April 2021 saw inflows of Rs 8,590 crore versus Rs 9,182.42 crore witnessed in March 2021. The higher number in March 2021 was higher owing to weekend dawning at the end of February the rollover of Rs 495-500 crore of February is reflected in March 2021.
“AMFI data is encouraging even in states of lockdown in the country especially in the state of Karnataka, Maharashtra and Tamil Nadu. I think we are going to see the SIP book continue. The mutual fund equity overall exposure may not go up so much because of the move to direct investing into the stocks and midcaps directly by the public but SIP book should remain strong,” said Deepak Shenoy, Founder & CEO of Capital Mind.
Even SIP accounts saw net additions of 6.99 lakhs accounts taking the tally of accounts to 3.79 crore accounts in April 2021 from 3.72 crore accounts in March 2021.
On the debt front, investors poured in Rs 1 lakh crore into open-ended debt schemes mutual funds last month after withdrawing Rs 52,528.07crore in March 2021. Market participants believe that this primarily due to corporates, banks, and institutions withdrawing at the end of the financial year for their regulatory requirements and more cash on the books. The same gets reinvested in April.
Gold exchange-traded funds witnessed a total net inflow of Rs 680 crore compared to Rs 662 crore in March.
The asset under management of the mutual fund industry rose by 3.03% to Rs 32.37 lakh crore in April 2021 compared to Rs 31.42 lakh crore. “The start to fiscal 2021-22 has been quite positive with Mutual Fund Industry owing to overall positive flows in all open-ended categories – be it Debt, Equity, Hybrid, Solutions-oriented, ETFs, Index and Fund of Funds and continued robust SIP contribution during April 2021,” said Venkatesh