Inflows into equity mutual fund (MF) schemes declined for a fourth consecutive month in April, even as systematic investment plan (SIP) inflows reached a record high of about Rs 26,632 crore.
Illustration: Dominic Xavier/Rediff
Equity schemes reported net inflows of Rs 24,269 crore in April, down 3 per cent month-on-month (M-o-M) and 41 per cent lower compared to the all-time high of Rs 41,156 crore in December 2024.
Despite the market gathering momentum, inflows remained subdued.
Experts cited US tariff uncertainties as a key factor weighing on investor sentiment. Nifty 50 rose 3.5 per cent in the past month, building on its 6.3 per cent recovery in March.
“Net sales have been flat, given the heightened volatility around the tariff concerns,” said Akhil Chaturvedi, executive director & chief business officer, Motilal Oswal AMC.
The slowdown in equity inflows since December is largely due to a decline in one-time or lumpsum investments, while SIPs continue to attract steady flows.
“With market uncertainty, lumpsum participation seems to have come down, as investors are probably taking a waiting approach to fresh investments,” said Manish Mehta, national head of sales, marketing & digital business, Kotak Mahindra AMC.
The absence of any major new fund launches during the month also weighed on lumpsum collections.
Only one active equity scheme — Kotak Energy Opportunities Fund — completed its new fund offering (NFO) period in April.
The NFO collected Rs 171 crore.
While SIP investments have remained elevated, the number of active SIP accounts declined for a fourth month in a row.
Active SIP accounts declined to 91.4 million from 100.5 million in March.
According to the Association of Mutual Funds in India (Amfi), the decline is largely due to the ongoing reconciliation exercise by the fund houses.
Amfi chief executive officer (CEO) Venkat Chalasani said the exercise, which continued for nearly four months, was now over.
The number of contributing SIP accounts, which were also on a decline, showed an uptick in April.
The tally surged to 83.8 million from 81.1 million in March.
Flexicap schemes led the inflow charts, accumulating over Rs 5,000 crore for a fourth straight month.
Largecap funds witnessed the highest growth rate as inflows went up 8 per cent compared to March.
Aggregate inflows into mid and smallcap funds moderated to Rs 7,314 crore from Rs 7,531 crore in March.
At the industry level, the assets under management (AUM) went up by Rs 4.3 trillion to a record high of Rs 70 trillion.
The gains were mostly supported by the Rs 2.2 trillion inflows into debt schemes, Rs 14,248 crore inflows in hybrid funds, and Rs 20,229 crore net investments into passive schemes.
The rebound in debt inflows was broadbased, with 12 out of 16 debt mutual fund categories reporting net inflows.
The surge in April inflows also reflected a return to normalcy and reaffirmed confidence in fixed-income instruments, particularly among companies redeploying idle cash following year-end disbursements, said Nehal Meshram, senior analyst, manager research, Morningstar Investment Research India.
