Equity fund inflows rise to Rs 20,534 crore in March, debt MFs see highest outflows in six months
For the first time, investments via systematic investment plans (SIPs) topped the Rs 14,000 crore mark in March.
- Apr 13, 2023,
- Updated Apr 13, 2023 6:16 PM IST
Mutual Fund data: The recent data released by the Association of Mutual Funds in India (AMFI) showed that the net inflows into open-ended equity funds sharply rose 31 per cent to Rs 20,534.21 crore in March even as the stock markets saw red in the period. In February, net equity inflows had stood at Rs 15,685.57 crore.
On the other hand, the debt and hybrid funds saw heavy outflow of Rs 56,884 crore in March 2023, as compared to Rs 13,815 crore outflow in February. These numbers are highest in 6 months.
Due to huge selling in debt and hybrid funds, open-ended MFs saw overall net outflows of Rs 21,693.91 crore during March.
The hybrid net outflows in March were Rs 12,372 crore, as compared to inflows of Rs 460.30 crore in February.
Further, liquid funds saw the highest outflow of Rs 56,924.13 crore, followed by money market funds. Liquid funds are preferred by investors to park their money for short periods of time. They invest predominantly in highly liquid money market instruments and debt securities of very short tenure and hence provide high liquidity.
Debt Fund category
Investors’ focus moved away from short-term capital gain to long duration funds after the Centre tweaked the mutual fund taxation in the Finance bill. This meant that debt mutual funds won’t enjoy the tax benefits of long-term capital gains.
As per an amendment in the Finance Bill 2023, beginning April 1, capital gains arising from debt oriented mutual fund schemes will be treated as short-term capital gain, irrespective of the period of holding. Investors in such schemes will have to pay tax in line with their income slab.
Therefore, capital gains from investments in mutual funds, where not more than 35 per cent is invested in domestic equities, will be taxed at a maximum marginal rate.
So far in 2023 (calendar year), the debt category has seen total outflows of Rs 81,015.51 crore, according to AMFI data.
In the debt category, the highest net inflows were seen in Corporate Bond Funds, which saw buying to the tune of Rs 15,626.16 crore.
Equity maintains good inflow
The AMFI data showed that the Growth/Equity-Oriented funds saw positive inflows. Overall data also showed that most equity fund categories saw healthy net inflows during the year. Case in point, Sectoral/Thematic Funds saw net inflows to the tune of Rs 23,731.01 crore, while Small-Cap Funds saw similar net buying of Rs 22,103.70 crore.
In March, the Sectoral/Thematic Funds saw the highest net inflows at Rs 3,928.97 crore. They were followed by Dividend Yield Funds with inflows of Rs 3,715.75 crore. Most of the fund came during the new fund offer period of SBI Dividend Yield Fund, which garnered Rs 3,496 crore.
Investors also invested heavily in small-cap stocks as the category saw net inflows of Rs 2,430.04 crore during the month. This was despite S&P BSE 250 SmallCap Index falling 10 per cent since the start of the year.
The Mid Cap Fund and Large & Mid Cap Fund also saw good inflows. Tax-saving Equity-linked Savings Schemes (ELSS) saw net inflows of Rs 2,685.58 crore during March.
"Investors continued to repose faith in equity as an asset class. Despite the flow of negative news, investor flows remained buoyant. Equity Funds continue their uptrend in terms of Net Inflows: ~20.5K cr. vis-à-vis ~15.7K cr in February. As a result of the financial year end, ELSS Funds mobilized gross inflows of ~4.2K cr. vis-à-vis 2.3K cr. in February, an 84% jump. Thematic/Sectoral Funds continue to attract the highest inflows month after month. Small cap funds continued to gather flow momentum building on recent months trend," Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC.
Growth Funds
| No. of Folios as on March 31, 2023 | Net Inflow (+ve)/Outflow (-ve) for March (in crore) | Net Assets Under Management as on March 31, 2023 (INR in crore) | Average Net Assets Under Management for the month March 2023 (INR in crore) | |
| Multi Cap Fund | 41,42,895 | 716.97 | 67,337.88 | 67,168.32 |
| Large Cap Fund | 1,29,73,512 | 911.29 | 2,35,760.10 | 2,34,482.18 |
| Large & Mid Cap Fund | 78,09,179 | 1,618.86 | 1,27,841.82 | 1,26,809.63 |
| Mid Cap Fund | 1,06,12,983 | 2,128.93 | 1,83,255.54 | 1,83,088.76 |
| Small Cap Fund | 7,21,832 | 3,715.75 | 13,994.08 | 12,320.89 |
“Mutual Funds witnessed significant AUM churn in March 2023 on the back of changes in tax laws. A large portion of the above outflow channeled itself back into duration funds like Corporate Bond, Banking and PSU fund, Dynamic bond, Long duration and Gilt funds, which saw inflows of Rs 39,000 crore. A large portion of the above outflow channeled itself back into duration funds like Corporate Bond, Banking & PSU fund, Dynamic bond, Long duration and Gilt funds,” said Ajaykumar Gupta, CBO, Trust Mutual Fund.
Systematic investment plans
In March, investments via systematic investment plans (SIPs) topped the Rs 14,000 crore mark for the first time ever. The SIP contribution for March came in at Rs 14,276 crore compared with Rs 13,686 crore in February. The total number of SIP accounts stood at 6.35 crore for March 2023 compared to 6.28 crore in February 2023. The SIP asset under management (AUM) stood at Rs 6.83 crore for the month.
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Mutual Fund data: The recent data released by the Association of Mutual Funds in India (AMFI) showed that the net inflows into open-ended equity funds sharply rose 31 per cent to Rs 20,534.21 crore in March even as the stock markets saw red in the period. In February, net equity inflows had stood at Rs 15,685.57 crore.
On the other hand, the debt and hybrid funds saw heavy outflow of Rs 56,884 crore in March 2023, as compared to Rs 13,815 crore outflow in February. These numbers are highest in 6 months.
Due to huge selling in debt and hybrid funds, open-ended MFs saw overall net outflows of Rs 21,693.91 crore during March.
The hybrid net outflows in March were Rs 12,372 crore, as compared to inflows of Rs 460.30 crore in February.
Further, liquid funds saw the highest outflow of Rs 56,924.13 crore, followed by money market funds. Liquid funds are preferred by investors to park their money for short periods of time. They invest predominantly in highly liquid money market instruments and debt securities of very short tenure and hence provide high liquidity.
Debt Fund category
Investors’ focus moved away from short-term capital gain to long duration funds after the Centre tweaked the mutual fund taxation in the Finance bill. This meant that debt mutual funds won’t enjoy the tax benefits of long-term capital gains.
As per an amendment in the Finance Bill 2023, beginning April 1, capital gains arising from debt oriented mutual fund schemes will be treated as short-term capital gain, irrespective of the period of holding. Investors in such schemes will have to pay tax in line with their income slab.
Therefore, capital gains from investments in mutual funds, where not more than 35 per cent is invested in domestic equities, will be taxed at a maximum marginal rate.
So far in 2023 (calendar year), the debt category has seen total outflows of Rs 81,015.51 crore, according to AMFI data.
In the debt category, the highest net inflows were seen in Corporate Bond Funds, which saw buying to the tune of Rs 15,626.16 crore.
Equity maintains good inflow
The AMFI data showed that the Growth/Equity-Oriented funds saw positive inflows. Overall data also showed that most equity fund categories saw healthy net inflows during the year. Case in point, Sectoral/Thematic Funds saw net inflows to the tune of Rs 23,731.01 crore, while Small-Cap Funds saw similar net buying of Rs 22,103.70 crore.
In March, the Sectoral/Thematic Funds saw the highest net inflows at Rs 3,928.97 crore. They were followed by Dividend Yield Funds with inflows of Rs 3,715.75 crore. Most of the fund came during the new fund offer period of SBI Dividend Yield Fund, which garnered Rs 3,496 crore.
Investors also invested heavily in small-cap stocks as the category saw net inflows of Rs 2,430.04 crore during the month. This was despite S&P BSE 250 SmallCap Index falling 10 per cent since the start of the year.
The Mid Cap Fund and Large & Mid Cap Fund also saw good inflows. Tax-saving Equity-linked Savings Schemes (ELSS) saw net inflows of Rs 2,685.58 crore during March.
"Investors continued to repose faith in equity as an asset class. Despite the flow of negative news, investor flows remained buoyant. Equity Funds continue their uptrend in terms of Net Inflows: ~20.5K cr. vis-à-vis ~15.7K cr in February. As a result of the financial year end, ELSS Funds mobilized gross inflows of ~4.2K cr. vis-à-vis 2.3K cr. in February, an 84% jump. Thematic/Sectoral Funds continue to attract the highest inflows month after month. Small cap funds continued to gather flow momentum building on recent months trend," Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC.
Growth Funds
| No. of Folios as on March 31, 2023 | Net Inflow (+ve)/Outflow (-ve) for March (in crore) | Net Assets Under Management as on March 31, 2023 (INR in crore) | Average Net Assets Under Management for the month March 2023 (INR in crore) | |
| Multi Cap Fund | 41,42,895 | 716.97 | 67,337.88 | 67,168.32 |
| Large Cap Fund | 1,29,73,512 | 911.29 | 2,35,760.10 | 2,34,482.18 |
| Large & Mid Cap Fund | 78,09,179 | 1,618.86 | 1,27,841.82 | 1,26,809.63 |
| Mid Cap Fund | 1,06,12,983 | 2,128.93 | 1,83,255.54 | 1,83,088.76 |
| Small Cap Fund | 7,21,832 | 3,715.75 | 13,994.08 | 12,320.89 |
“Mutual Funds witnessed significant AUM churn in March 2023 on the back of changes in tax laws. A large portion of the above outflow channeled itself back into duration funds like Corporate Bond, Banking and PSU fund, Dynamic bond, Long duration and Gilt funds, which saw inflows of Rs 39,000 crore. A large portion of the above outflow channeled itself back into duration funds like Corporate Bond, Banking & PSU fund, Dynamic bond, Long duration and Gilt funds,” said Ajaykumar Gupta, CBO, Trust Mutual Fund.
Systematic investment plans
In March, investments via systematic investment plans (SIPs) topped the Rs 14,000 crore mark for the first time ever. The SIP contribution for March came in at Rs 14,276 crore compared with Rs 13,686 crore in February. The total number of SIP accounts stood at 6.35 crore for March 2023 compared to 6.28 crore in February 2023. The SIP asset under management (AUM) stood at Rs 6.83 crore for the month.
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Also read: RBI evaluating potential bidders, including Kotak Mahindra Bank, CSB, for IDBI Bank: Report