Inflows into equity MFs slump 61 pc in April; FMPs register Rs 17,644 cr outflow

Net inflows into equity mutual funds plunged 61 per cent to Rs 4,609 crore in April compared to the previous month, as volatility in stock markets and uncertainty over outcome of general elections impacted investor sentiments.

In March, net inflows into equity funds stood at Rs 11,756 crore.

Latest data from the Association of Mutual Funds in India (AMFI) showed that net inflows into these funds dropped 60.79 per cent in April compared to the previous month.

The average Assets Under Management (AUM) of the mutual funds rose to Rs 25.27 lakh crore in April. In the same month a year ago, the same was at Rs 23.25 lakh crore.

The Fixed Maturity Plans (FMPs) witnessed a net outflow of Rs 17,644 crore last month while net outflow from debt-oriented schemes stood at Rs 18,949.76 crore, as per AMFI.

Net AUM in FMPs stood at Rs 1,41,170 crore in April. FMPs are close-ended mutual fund schemes that invest in debt instruments.

In recent months, the mutual fund industry has been grappling with redemption pressures in the wake of debt crisis at various groups, including IL&FS and Essel. Some fund houses have also deferred payouts to investors in fixed income schemes.

Last month, credit risk funds recorded an outflow of Rs 1,253 crore.

As per the AMFI, inflows into Systematic Investment Plans (SIPs) rose to Rs 8,238 crore as compared to Rs 8,055 crore in March.

In the year-ago period, the inflows into SIPs stood at Rs 6,990 crore.

"Overall nervousness in the markets owing to credit events, rating downgrades and defaults, coupled with global trade imbalance, and uncertainty over outcome of general elections has led to investors getting into wait-and-watch mode," AMFI Chief Executive Officer N S Venkatesh said.

He also said that it expects investors would return in a big way, as corporate earnings improve further and once the general elections related uncertainty and global headwinds recede over the next few months.

About performance of equity mutual funds in April, Himanshu Srivastava, senior analyst at Morningstar Investment Adviser India said that in absolute terms, the net inflow is good in the wake of volatile markets and uncertainty over election outcome.

The relatively lesser quantum could be a result of many investors getting cautious ahead of the election results, he added.

From April, AMFI has come out with data in a new format as mandated by Sebi. The format requires categorisation of schemes into various segments, open-ended, close-ended and equity-oriented schemes.