Which mutual fund categories got the most money as equity inflows slip in April?

The assets under management of Indian mutual funds inched up to Rs 38.04 trillion at the end of April from Rs 37.56 trillion a month before, thanks mainly to heavy inflows into debt schemes even as equity schemes received a lower amount.

Net inflows into equity MFs fell to Rs 15,890 crore in the first month of the new financial year from Rs 28,463 crore in March and Rs 19,705 crore in February, according to data from the industry group Association of Mutual Funds in India (AMFI).

Debt funds, however, recorded massive net inflows of Rs 54,757 crore in April, compared with outflows of Rs 1.15 trillion in March as companies and other institutions likely redeemed their investments at the end of the fiscal year.

Hybrid funds—schemes which invest across equity, debt and gold— also recorded net inflows during April, pulling in Rs 7,240 crore, compared with outflows of Rs 3,603 crore during March.

Systematic investment plans (SIP) continued to be the favoured mode of investments for retail investors. The number of SIP accounts, which went past 5 crore in January, increased further to 5.39 crore in April. The amount collected via SIPs fell to Rs 11,863 crore in April from Rs 12,327 crore in March. Inflows remained strong despite weak markets, showing that retail investors are understanding the nuances of managing volatility and risk adjustment.

Equity schemes

All equity fund categories recorded net inflows in March, AMFI data show. Thematic and sectoral funds topped the charts in April and received net inflows of Rs 3,843 crore, sharply higher than Rs 307 crore in March.

Large and mid-cap schemes occupied the second rank with more than Rs 2,000 crore, followed by flexicap and small-cap funds with more than Rs 1,700 crore each.

Mid-cap funds received net inflows of Rs 1,550 crore. Multi-cap funds, a recent favourite of many investors, mopped up Rs 1,340 crore on a net basis in April.

Large cap schemes and focused funds gathered more than Rs 1,250 crore each in net inflows during the month. Tax-saving schemes mobilized only Rs 307 crore during April, which is understandable given it was the first month of the financial year.

Hybrid funds

Among hybrid funds, balanced advantage schemes received net inflows of Rs 1,543 crore in April. Balanced advantage funds have been an investor favourite in recent months as equity markets turn volatile. Aggressive hybrid funds got net inflows of Rs 701 crore.

However, arbitrage funds recorded topped the category in April, receiving net inflows of Rs 4,093 crore. This compares with net outflows of Rs 6,796 crore during March.

Index funds, which include both debt and equity schemes, mopped up Rs 6,062 crore. Non-gold ETFs recorded net inflows of Rs 8,663 crore.

Debt funds

Among debt funds, categories that include shorter-tenor schemes recorded significant net inflows while those with longer-term tenors recorded outflows. This could be because investors shuffled their portfolios in anticipation of a rise in interest rates. Indeed, the Reserve Bank of India raised its benchmark rates earlier this month.

Liquid funds recorded highest net inflows of Rs 28,731 crore. This was followed by money market funds with Rs 16,194 crore and ultra-short-duration funds with Rs 15,089 crore. Overnight funds got Rs 4,128 crore.

Short-duration schemes saw net outflows of Rs 4,452 crore and banking and PSU funds recorded net outflows of Rs 3,096 crore. Corporate bond funds saw net outflows of Rs 2,553 crore.