The inflows into equity mutual fund schemes dipped 14 per cent to an 11-month low of ₹25,082 crore in March from ₹29,303 crore in February, due to market volatility and a lower contribution through Systematic Investment Plans (SIPs).
Interestingly, it marked the third consecutive month of lower investment in equity MF schemes.
The number of contributing SIP accounts fell by 15 lakh in March to 8.11 crore from 8.26 crore in February due to reconciliation of accounts, according to data released by the Association of Mutual Funds in India on Friday.
SIP inflows fell to a four-month low of ₹25,926 crore in March, compared to ₹25,999 crore in February, while the number of SIP accounts closed was higher at 51 lakh against 40 lakh new accounts opened.
N Venkat Chalasani, CEO of AMFI, said that the details on contributing SIP accounts highlight the number of SIPs that were paused even for one month.
Asked whether the fall in contributing SIP accounts points to mis-selling, particularly after SEBI lowered the minimum SIP contribution to ₹250 a month, Chalasani said, Chota SIP is a work in progress and it has nothing to do with the increase in stoppage of SIPs. A clear trend may emerge once the reconciliation of accounts is completed in two months, he added.
Thematic funds hit
Inflows into small- and mid-cap schemes jumped sharply to ₹4,092 crore (₹3,722 crore) and ₹3,439 crore (₹3,407 crore), respectively, as the valuations of these stocks were beaten down. Inflows into thematic funds were the lowest at ₹172 crore (₹5,712 crore) as investors booked profits amid growing uncertainty.
Hybrid funds registered a net outflow of ₹946 crore (inflow of ₹6,804 crore) as arbitrage funds logged an outflow of ₹2,855 crore (inflow of ₹6,804 crore in February).
Debt funds recorded an outflow of ₹2.03 lakh crore last month, compared to ₹6,526 crore in February, due to the financial year-end phenomenon.
Overall, the industry AUM increased to ₹65.74 lakh crore (₹64.53 lakh crore), largely due to mark-to-market gains.
Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India, said investors turned cautious amid market volatility spurred by the US indication of trade war escalation in key sectors such as technology and manufacturing.
Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC, said that while it is an opportunity for investors to increase their equity allocations, the MF performance in April will be a better indicator to gauge investor sentiment. “We expect redemptions to come down,” he said.
Published on April 11, 2025
