Equity mutual funds inflow rise 15% to Rs 330 billion in Q1 of FY19

Equity mutual funds saw inflow of nearly Rs 330 billion in the first quarter of the current fiscal, a surge of 15 per cent year-on-year, underpinned by strong participation from retail investors, especially in small towns.

In comparison, equity funds, which also include equity-linked saving schemes (ELSS) and arbitrage funds, saw net inflow of Rs 283.32 billion in the April-June period of last financial year, according to Association of Mutual Funds in India (Amfi).

"'Mutual funds sahi hai', the investor awareness campaign being run by Amfi under guidance from Sebi, has generated a lot of interest among potential investors, who are now looking at mutual funds as a preferred investment option," Amfi Chief Executive NS Venkatesh said.

"We are confident that mutual funds will continue to see strong inflows, despite the recent volatility. Inflows through the Systematic Investment Plan route (SIP) from retail investors and flows from B30 cities, continue to remain robust," he added.

Echoing similar views Kaustubh Belapurkar, director Manager Research at Morningstar said that flows into equity funds remain strong through the year. Despite markets being volatile since the start of 2018, investors are taking a long term view in equities.

"SIPs continue to be strong contributor with the monthly SIP numbers currently standing at Rs 73 billion. We expect this trend to continue going forward as investors are starting to acknowledge the long term wealth creation potential of equities, he added.

SIP is an investment vehicle that allows investors to invest in small amounts periodically instead of lump sum. The frequency of investment is usually weekly, monthly or quarterly.

Individually, in the first quarter of the current financial year, equity mutual funds (MFs) saw a net investment of Rs 124.09 billion in April, Rs 120.7 billion in May, Rs 82.37 billion in June, taking the total for the quarter to Rs 327.16 billion, the data showed.

Overall, investors have put in close to Rs 1.4 trillion in mutual fund schemes during the quarter under review.

The strong inflows have pushed the asset base of equity mutual funds (MFs) by 33 per cent to Rs 7.86 trillion at the end of June this year, from Rs 5.91 trillion a year ago.