Investors pour money into mutual funds, withdraw even more from other end; inflows, outflows surge

Mutual fund investments have seen an interesting trend in the month of March, with both inflows and outflows surging.

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Mutual fund investments have seen an interesting trend in the month of March, with both inflows and outflows surging. As more and more foreign portfolio investors (FPI) withdrew money from India, mutual funds outflows too skyrocketed to reach Rs 2.12 lakh crore in March. While outflows were surging, equity mutual funds took a different route, with inflows reaching one-year high of Rs 11,485 crore, rising 7% from the previous month, according to the data published by Association of Mutual Funds in India (AMFI). While domestic equity markets tumbled in March, experts highlighted the increased buying by domestic equity mutual funds.

Majority of the equity mutual fund inflows were registered in Multi Cap funds, registering inflows worth Rs 2,268 crore; followed by Large Cap funds where inflows over Rs 2,060 crore were seen in the month of March. Large and Mid Cap funds saw inflows of Rs 859 crore; and on the other hand Small Cap funds received just Rs 162.5 crore. Focused funds too attracted inflows close to Rs 2,000 crore in the period under review. Dividend yield funds were the only ones that saw net outflows worth Rs 29 crore.

On the other hand, income and debt-oriented mutual fund schemes saw net outflows of Rs 1.94 lakh crore in the month of March as compared to Rs 28,000 crore in the previous month. Liquid funds registered the biggest outflow with funds worth Rs 1.10 lakh crore flowing outwards. Average net asset under management (AUM) too saw a downward trend in the month of March. Net AUM in the month of March was revised down to 24.7 lakh crore from Rs 28.28 lakh crore in February.

Balance funds saw a net outflow of Rs 1,515 crore in the month of March, jumping up from outflows of Rs 1,182 crore in the preceding month. Among the closed-ended equity schemes, outflows worth Rs 238 crore were seen. As FPIs exited Indian equity and debt markets with the mounting fear of coronavirus in March, Mutual funds along with Domestic Institutional Investors bought more and more.

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