Mutual funds saw inflows across most categories in April as retail investors continued to enter the markets to invest through systematic investment plans (SIPs).
According to data from the Association of Mutual Funds in India (AMFI), the total assets under management (AUM) of the fund industry rose by ₹45,999.48 crore to ₹23.93 lakh crore.
Equity-oriented schemes saw net inflows of nearly ₹6,213 crore, while debt funds saw investors putting in a net ₹43,431.55 crore in April. More importantly, the SIP AUM rose to ₹2.76 lakh crore in April from ₹2.4 lakh crore in the previous month.
Incidentally, the rise in AUM can be attributed to the gains in the market, as the benchmark Sensex rose 14.42% in April, which was the highest monthly gain since May 2009 when the 30-share barometer had gained 28.26%.
“Inflows into liquid funds and mark to market (MTM) gains in equity mutual funds aided a 7.5% jump in domestic mutual fund industry’s assets under management (AUM) in April 2020,” stated a note by CRISIL.
Inflows into equity mutual funds, though only half the record flows seen in March, also contributed to the rise, it added. Meanwhile, the number of SIP accounts rose marginally from 3.12 crore to 3.14 crore in the same period. The contribution through SIPs, however, registered a dip in April at ₹8,376.11 crore, lower than the previous month’s ₹8,641.20 crore.
“It is heartening to note that despite subdued economic scenario, retail investors are seen to be continuing with their goal-based investment discipline, displaying mature investment conduct, as seen from month-on-month rise in retail AUMs, as also marked rise in the number of SIP accounts,” said N.S. Venkatesh, chief executive, AMFI.
“Slowing redemptions in retail and overall mutual fund schemes is indicative of rising investor preference for mutual funds as a long-term wealth creation,” he added.
According to Mr. Venkatesh, fixed income schemes especially low duration funds could see increased interest in the coming months due to the low inflation and benign interest rate regime.