MUMBAI: Flows through systematic investment plan (SIPs) stayed robust in March and fell only marginally to Rs 25,926 crore, even as the overall industry saw an outflow led by debt funds, revealed data from Association of Mutual Funds in India (Amfi) on Friday.
“The mutual fund industry has demonstrated resilience and growth, despite market volatility and global policy uncertainties driven by frequent US tariff changes,” said Venkat Nageswar Chalasani, chief executive, Amfi.
He added that the steady increase in SIP flows was a testament to the growing maturity of retail investors in understanding the importance of systematic and disciplined investing.
However, overall equity flows dipped to an 11-month low at Rs 25,082 crore. In addition, due to the year-end impact, outflows from debt funds were to the tune of Rs 2.03 lakh crore, and another Rs 1.33 lakh crore were withdrawn liquid funds. Juzer Gabajiwala, director of Ventura Securities, said that arbitrage funds saw a dip due to the same reason.
“Continued incremental inflows were mainly seen in flexicap, smallcap and multicap, which is a positive sign, indicating a long-term investment approach by investors despite global and macroeconomic concerns,” said Jatinder Pal Singh, CEO, ITI Mutual Fund.
In March, equity schemes recorded their lowest inflows since last April, and AMFI has attributed the fall to volatility in the market raised by concerns around reciprocal tariffs by the US.
Inflows into equities fell by 14.4% in March to Rs 25,082 crore, mainly led by a 97% drop in the flows into sectoral/thematic funds, which had contributed 35% to the total equity flows into mutual funds in the financial year that ended March 31. Inflows into large cap schemes also fell by 13.5% to Rs 2,479.31 crore.
However, that into small cap funds rose by 9.9% in March over last month to Rs 4,092.12 crore and midcap schemes inflow rose marginally by 1% to Rs 3,438.87 crore. Hybrid schemes saw an outflow of Rs 946.56 against Rs 6,803.85 crore inflow in February and Rs 8,767.52 crore of positive flow in January.
Sandeep Bagla, CEO of TRUST Mutual Fund, said that in March, most investors might have booked profits due to the year-end, and because of the current volatility, they may decide to invest in the next financial year. He attributed the flows into smallcap schemes to opportunities that arose because they had corrected more while noting that most of the SIPs happen in small and flexicap funds. Calling thematic inflows a function of a bull market, he said that they are passive strategies restricted to a theme, and in the long-term, these are not recommended.
The data also revealed that net assets under management rose to Rs 65.74 lakh crore in March as the benchmark indices rose nearly 6% in the month of March after three consecutive months of fall.
Overall, in the last financial year, SIP inflows have touched an all-time high of Rs 2.9 lakh crore, rising by 45% on a year-on-year basis, the most since fiscal 2018. Inflow into equity schemes was at Rs 4.17 lakh crore and debt schemes at Rs 1.38 lakh crore. Assets under management were at Rs 65.74 lakh crore.
Source: The Financial Express
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