Net equity inflows into mutual funds for March were the highest in a year, while SIP contributions touched a new high, topping Rs 14,000 crore in March.

Data released by the Association of Mutual Funds in India (AMFI) showed net inflows for March stood at Rs 20,534 crore, compared to Rs 15,686 crore in February. The highest inflows were recorded by sectoral/ thematic schemes at Rs 3,929 crore, a category increasingly finding favour as investors seek value creation.

The dividend yield category also gave a leg-up to equity schemes, thanks to the strong Rs 3,716-crore inflow primarily on account of SBI MF’s NFO last month. The fund house had mobilised Rs 3,600 crore for the SBI Dividend Yield Fund back in March. In February, the category had shown inflows of just Rs 48 crore.

SIP contributions for the month stood at Rs 14,276 crore, a new high. The SIP AUM stood at Rs 6.83 trillion in March, compared to Rs 6.74 trillion in February.

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N S Venkatesh, CEO of AMFI, said: “SIP inflows continue to soar, breaking the record on a month-on-month basis; it would not be an overkill to say that the retail investor is the hero of the markets. The spike in investors witnessed in the post-pandemic period, despite the volatility due to global geo-political reasons and inflation, is also a cue to resilient investor behaviour.”

On the other hand, there was an exodus from debt schemes, with outflows at Rs 56,884 crore compared to Rs 13,815 crore in February. This was despite a massive Rs 31,179-crore inflow into the debt MF universe in the final week of March, following removal of the indexation benefit from long-duration funds.

This was led by a Rs 56,924-crore withdrawal from liquid funds, along with outflows of over Rs 8,000 crore, Rs 10,000 crore, and Rs 11,000 crore from the overnight, liquid, and money market schemes, respectively. This could be attributed to March being the quarter end, when corporates and banks usually withdraw funds to meet their advance tax payment and capital adequacy requirements.

“The uncertain macro environment, higher commodity prices, muted returns, rising bond yields, slowdown in growth, and rising inflation have likely led the investors to redeem investments in debt funds in favour of other avenues,” said Jean Christophe, director and chief marketing officer, Sharekhan by BNP Paribas.

Hybrid schemes saw inflows of Rs 24,611 crore for the month, with a bulk of the contributions coming into arbitrage funds at Rs 17,616 crore. Index funds saw inflows of over Rs 6,000 crore, while gold ETFs saw inflows of Rs 640 crore and other ETFs raked in Rs 16,476 crore.

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Net AUM for the industry stood at Rs 39.42 trillion as of March 31, while average AUM for the month was Rs 40.04 trillion. Retail AUM (equity, hybrid, and solution-oriented) stood at Rs 20.34 trillion for March, with an average AUM of Rs 20.45 trillion.

MF folios, too, reached an all-time high of 145.7 million, with retail MF folios at an all-time high too.

According to the data, participation by unique investors (first-time investors) jumped by 11 million from March 2021 to March 2022, and by 4 million from March 2022 to March 2023.

Women take the field

The number of women investors was up 58.5% from 4.69 million in December 2019 to 7.45 million in December 2022, based on PAN data.

T30 cities saw a rise of 49.1% to 4.16 million from 2.79 million during the same period. B30 regions saw a jump of 72.3% from 1.90 million to 3.28 million.

Those in the 18-24 age group showed a spike of 324% from 66,417 in December 2019 to 281,905 in December 2022. In the 25-35 age band, the number jumped 133% from 859,500 to 2 million during the three-year period.