Inflows into equity mutual fund schemes increased 56 per cent in March to ₹40,450 crore against ₹25,978 crore logged in February as investors used the sharp fall in market valuation to pump in more money.
The overall equity asset under management plunged 10 per cent last month to ₹31.98 lakh crore against ₹35.39 lakh crore largely due to all category of schemes witnessed mark-to-market loss, according to the Association of Mutual Funds in India data released on Friday.
Interestingly, all the equity schemes registered a strong inflows. Flexi-cap inflow increased to ₹10,054 crore (₹6,925 crore), while mid and small cap funds recorded an impressive inflow of ₹6,264 crore (₹4,003 crore) and ₹6,064 crore (₹3,881 crore). Large and mid cap funds logged an inflow of ₹5,307 crore (₹3,138 crore) reflecting retail investors faith in mutual funds to tap the equity markets.
The inflows through systematic investment plan was up at ₹32,087 crore (₹29,845 crore) even as the AUM plunged 9 per cent to ₹15.11 lakh crore (₹16.64 lakh crore) due to mark-to-market loss and spill-over from the previous month.
The contributing SIP accounts increased to 9.72 crore (9.44 crore)
Venkat Chalasani, CEO, Association of Mutual Funds in India, said retail investors have reposed their faith in MF investments even while the markets remain most volatile on the back of geopolitical tensions and inflation worries.
The long-term economic growth story of India led by buoyant consumption still remains intact and this will support SIP inflows, he added.
While the job losses in the IT sector remains a concern, there are new jobs being created across sectors and this should support investments in MFs in the long run, he said.
Despite mark-to-market loss in MF equity schemes, the Specialised Investment Funds asset increased 9 per cent to ₹10,620 crore against Rs 9,711 crore in February as the fund houses used the equity derivatives market to hedge their investments.