Net inflow of equity mutual funds drops by 44 per cent in April 2022

Markets have been trending down in April 2022, and the consequence may be seen in net inflows for the month. Continue reading to know more.

S&P BSE Sensex Total Returns Index (TRI) fell about 2.53 per cent in April 2022, but the broader market excelled, with S&P BSE Mid-Cap TRI and S&P BSE Small-Cap TRI concluding the month with gains of 1.34 per cent and 1.43 per cent, respectively. Having said that, the market barometer's underperformance has influenced equity mutual fund inflows.

The net inflows of equity mutual funds in April 2022 were Rs 15,890.38 crore, compared to about Rs 28,463.49 crore the previous month. This demonstrates that the drop was around 44 per cent month on month (MoM). Equity Linked Saving Schemes (ELSS) and Multi-Cap Funds contributed significantly to this decline, with both seeing a greater than 80 per cent drop in their net inflows. Having said that, the encouraging news is that there were no negative net inflows, and even the asset under management (AUM) growth in equity funds was not negative.

April 2022 was a record month for Hybrid Funds, with a net inflow of Rs 7,240.19 crore, compared to a net outflow of Rs 3,603.61 crore the previous month. However, debt mutual funds had a positive net inflow as well as an increase in AUM.

In terms of Systematic Investment Plan (SIP) contributions, the month of April 2022 had a 3.8 per cent decrease in SIP contributions as compared to March 2022. However, on a year-over-year (YoY) basis, it increased by roughly 38 per cent. As a result, we may conclude that, while investors are hesitant about putting fresh money into equity funds, there is no panic selling.