Investor appetite for equity mutual funds reduced with fresh inflows hitting a 12-month low, as uncertainty over the fallout of the tariff dispute prompted them to allocate lumpsum money to debt and hybrid schemes.
Investors allocated ₹24,269 crore to equity mutual funds in April, lower than ₹25,802 crore in March. They continued to allocate money through systematic investment plans (SIPs), where collections rose to ₹26,632 crore during the month, higher than ₹25,926 crore in the previous month.
Debt funds saw inflows of ₹2.19 lakh crore in April as against outflows of ₹2.02 lakh crore during the previous month, as corporates allocated surplus money at the start of the financial year.
Led by fixed income, the mutual fund industry's average assets under management (AUM) rose by 4.2% to ₹69.50 lakh crore, higher than ₹66.70 lakh crore in March.
"A significant portion of the debt allocation was directed toward liquid and liquid-plus strategies, suggesting a preference for short-term parking of funds, possibly in anticipation of better deployment opportunities ahead," said Ankur Punj, managing director and national head at Equirus Wealth.
Liquid funds saw an addition of ₹1.19 lakh crore, while overnight funds added ₹23,900 crore and money market funds added ₹31,500 crore.
In equity schemes, investors poured the highest money into flexicap funds, allocating ₹5,542 crore, marginally lower than ₹5,615 crore in the previous month. Small-cap funds got ₹4,000 crore compared to ₹4,092 crore during the last month, while midcaps got ₹3,314 crore compared to ₹3,439 crore earlier. Sectoral and thematic funds added ₹2,001 crore compared to ₹170 crore in March. Large-cap funds collected ₹2,671 crore compared to ₹2,479 crore in the previous month.
Amongst hybrid funds, multi-asset allocation funds that invest in a mix of equity, debt, and gold received inflows of ₹2,106 crore compared to ₹1,670 crore in the previous month. Arbitrage funds saw inflows of ₹11,790 crore in April against ₹2,855 crore outflows in the previous month as corporate investors added money in the first month of the financial year to this category for its tax efficiency compared to liquid funds.
The outflows from gold exchange-traded funds (ETFs) subsided in April. The category saw outflows of ₹6 crore compared to an outflow of ₹77 crore in March.
"The reversal, though subdued in magnitude, suggests that the profit-booking phase seen in March may have run its course, with some investors selectively re-entering positions in anticipation of continued global uncertainties and structural support for gold prices," said Nehal Meshram, senior analyst-manager research at Morningstar Investment Research India.
Investors allocated ₹24,269 crore to equity mutual funds in April, lower than ₹25,802 crore in March. They continued to allocate money through systematic investment plans (SIPs), where collections rose to ₹26,632 crore during the month, higher than ₹25,926 crore in the previous month.
Debt funds saw inflows of ₹2.19 lakh crore in April as against outflows of ₹2.02 lakh crore during the previous month, as corporates allocated surplus money at the start of the financial year.
Led by fixed income, the mutual fund industry's average assets under management (AUM) rose by 4.2% to ₹69.50 lakh crore, higher than ₹66.70 lakh crore in March.
"A significant portion of the debt allocation was directed toward liquid and liquid-plus strategies, suggesting a preference for short-term parking of funds, possibly in anticipation of better deployment opportunities ahead," said Ankur Punj, managing director and national head at Equirus Wealth.
Liquid funds saw an addition of ₹1.19 lakh crore, while overnight funds added ₹23,900 crore and money market funds added ₹31,500 crore.
In equity schemes, investors poured the highest money into flexicap funds, allocating ₹5,542 crore, marginally lower than ₹5,615 crore in the previous month. Small-cap funds got ₹4,000 crore compared to ₹4,092 crore during the last month, while midcaps got ₹3,314 crore compared to ₹3,439 crore earlier. Sectoral and thematic funds added ₹2,001 crore compared to ₹170 crore in March. Large-cap funds collected ₹2,671 crore compared to ₹2,479 crore in the previous month.
Amongst hybrid funds, multi-asset allocation funds that invest in a mix of equity, debt, and gold received inflows of ₹2,106 crore compared to ₹1,670 crore in the previous month. Arbitrage funds saw inflows of ₹11,790 crore in April against ₹2,855 crore outflows in the previous month as corporate investors added money in the first month of the financial year to this category for its tax efficiency compared to liquid funds.
The outflows from gold exchange-traded funds (ETFs) subsided in April. The category saw outflows of ₹6 crore compared to an outflow of ₹77 crore in March.
"The reversal, though subdued in magnitude, suggests that the profit-booking phase seen in March may have run its course, with some investors selectively re-entering positions in anticipation of continued global uncertainties and structural support for gold prices," said Nehal Meshram, senior analyst-manager research at Morningstar Investment Research India.
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