Tide turns for MFs; April sees net inflow

Mutual fund houses can breathe easy. After seeing a net outflow of Rs 28,297 crore in 2008-09, inflows of Rs 1,54,192 crore were seen in April, according to data from the Association of Mutual Funds in India (Amfi).

Income funds were the major contributors to assets in April. They saw inflows worth Rs 1,03,055 crore. Liquid and money market funds mopped up Rs 51,852 crore while new fund offers garnered Rs 119 crore.

However, despite the market recovering reasonably well since mid-March, equity funds saw an outflow of Rs 196 crore. Balanced funds also saw a net outflow of Rs 64 crore.

“Mutual funds have been receiving net inflows usually, but these were unusual circumstances. Not just equity but even debt markets went into a tailspin followed by a tightening of liquidity. There was a sense of pessimism among investors. It was a first-time experience for many fund managers. But, fund houses handled it quite well,” a fund manager said.

The numbers from 2008-09 reveal some interesting facts. For instance, while there was erosion in the markets, equity funds actually saw net inflows worth Rs 1,056 crore.

Fund categories, which witnessed maximum outflows during that period, were income funds and liquid funds. There was a net outflow of Rs 32,168 crore in income funds. Liquid funds saw net outflows worth Rs 3,600 crore. Similarly, exchange-traded funds saw Rs 1,082 crore going out.

“The October crisis saw a lot of money from mutual funds being flushed out as panic spread. However, government agencies acted together and they recovered. The outflow was heavy in debt funds as we saw huge redemptions in fixed maturity plans. Liquid funds also saw some outflow,” said a distributor.

The number of systematic investment plan accounts fell to 3.26 million by March-end from 3.62 million at September-end.