Rs.5 lakh crore wiped out but record equity inflows display industry’s fighting spirit

Nearly Rs.5 lakh crore has been wiped out from the MF industry in March. The industry’s AUM has shrunk to Rs 22.26 lakh crore, 18% lower than Rs 27.23 lakh crore in February. The decline is primarily driven by mark-to-market losses in equity assets and year-end outflows from debt funds.

Equity markets have witnessed a sharp decline in March following concerns over the rapid spread of coronavirus. Both Nifty 50 and Sensex corrected nearly 24% in March.

Meanwhile, debt funds witnessed an outflow worth Rs 1.95 lakh crore in March as against Rs 27,939 crore outflows in February. This was primarily due to year-end outflows from liquid funds, which saw a net outflow of Rs 1.10 lakh crore in March. Categories like low duration fund, money market fund and short duration fund also witnessed outflows. 

N S Venkatesh, Chief Executive, AMFI said, “The decline in AUMs is on account of quarter end phenomena - banks maintaining capital adequacy norms and corporates fulfilling advance tax obligation, and these funds would return in April."

The MF industry has witnessed heartening numbers in terms of net inflows in equity schemes. Despite the equity markets witnessing a meltdown in March, equity schemes witnessed Rs 11,700 crore of net inflows, the highest in FY 2019-20.

Among equity schemes, multi cap, large cap and ELSS have emerged as the most sought-after schemes. Multi-cap funds witnessed the highest net inflows at Rs 2,268 crore as against Rs 1,624 crore in February. Large cap funds emerged as the second most popular category with net inflows of Rs 2,060 crore compared to Rs 1,606 crore in February. Next in the list was ELSS with Rs 1,994 crore of net inflows.

Meanwhile, the sharp correction across category has affected inflows in small cap funds. The category witnessed around Rs.160 crore of net inflows in March as against net inflow of Rs.1500 crore in February.

Data available on SIPs also remained encouraging. Monthly SIP flows increased to Rs 8,641 crore in March from Rs 8,513 crore in February. Number of SIP accounts grew by 2.47 lakh folios in March taking the total count to over 3.11 lakh crore. 

Commenting on equity inflows, Venkatesh said, “Instead of exiting their investment in equity funds, retail investors have not only held on but added more AUMs and folios through SIPs recording highest ever equity inflows at Rs 11,722 crore, highest ever equity monthly mobilisation at Rs 30,109 crore and record high annual SIP mobilisation of Rs 1 lakh crores during the last fiscal.”