MF Update:March equity net inflows increase 8.6 per cent on monthly basis

The month of March 2020 has been one of the worst months in terms of equity returns. The frontline equity indices such as Sensex fell by more than 24 per cent and broader indices even more. Despite such a huge fall in the market, net inflows into equity dedicated mutual fund increased by 8.6 per cent on a monthly basis. Net inflows (gross inflow: Rs 30,109 crore, less redemption: Rs 18,386 crore) for the month of March was Rs 11,722 crore against Rs 10,795 crore in the month of February 2020.  

All categories of equity funds have witnessed a net inflow except for dividend yield fund that has witnessed an outflow of Rs 29 crore. Highest inflow was witnessed in multi-cap funds (Rs 2,268 crore), followed by large-cap funds (Rs 2,060 crore).  Focussed funds too saw an inflow close to Rs 2,000 crore. Investments through monthly systematic investment plans (SIPs) also remained intact at around Rs 8,500 crore.

Despite such an increase in the inflows into equity dedicated funds, the asset under management (AUM) of the domestic mutual fund industry fell by 18.2 per cent, month on month basis. It fell from Rs 27.22 lakh crore in the month of February to Rs 22.26 lakh crore in the month of March. One of the reasons for such a fall in AUM is the outflow from income and debt schemes. In the month of March 2020, debt categories of funds saw a net outflow of Rs 1.94 lakh crore against an outflow of Rs 28 thousand crore in the month of February. Fall in the economic activity and March being a quarter as well as year-end always sees outflow from liquid funds where corporates have a larger investment. Highest outflow was witnessed in the liquid fund. It has seen a net outflow of Rs 1.1 lakh crore.