Equity mutual funds garner Rs 124 bn in April; drive AUM to record Rs 8 trn

Investors have pumped in a staggering over Rs 124 billion in equity mutual funds in April, driving the assets under management to a record Rs 8 trillion.

This is much higher than over Rs 66.5 billion inflow seen in such schemes in March, according to the data from the Association of Mutual Funds in India (Amfi).

The strong inflow has pushed the asset base of equity mutual funds (MFs) by more than 6 per cent to Rs 8 trillion at the end of April from Rs 7.5 trillion in the preceding month.

"At the start of April, markets had corrected, which would have led to investments by some value conscious mutual fund investors. Also, March is seasonally a tight month due to investors utilising money towards payment of insurance premia. Lastly, there were NFO's in April which provided fresh investment opportunities," Viral Berawala, CIO at Essel Mutual Fund said.

Echoing similar views, Vidya Bala, head of the mutual fund research at FundsIndia.com said: "March saw higher outflow in equity as a result of which net flows reduced. The decline in stock market and fear of long term capital gain tax (LTCG) also may have led to some outflows. Finally, the dust appears to have settled down in April and the month has seen higher net inflow".

Overall, mutual fund schemes witnessed an inflow of Rs 1.4 trillion last month as compared to redemptions of Rs 507.52 billion in March due to new tax on long-term equity gains.

Of this, equity and equity-linked saving schemes saw an inflow of Rs 124.09 billion during the period under review, the data showed.

Besides, liquid funds or money market category -- with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon -- witnessed an infusion of over Rs 1.16 trillion. In contrast, a net sum of Rs 4.36 billion and Rs 540 million was pulled out from gilt and gold exchange-traded fund (ETF) respectively.

The assets base of the MF industry, comprising 42 players, increased to Rs 23.25 trillion from Rs 21.36 trillion.

Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. The funds are invested in stocks, bonds and money market instruments, among others.