Inflow in equity MF plunges 27% to Rs 81,600 cr in FY20

New Delhi: Investors pumped Rs 81,600 crore in equity-oriented mutual fund (MF) schemes in 2019-20, registering a decline of 27 per cent from Rs 1.12 lakh crore inflows in the preceding fiscal.

However, this was the sixth successive year of net inflows in equity mutual funds, according to data by the Association of Mutual Funds in India (AMFI).

The flows into equity funds in the last fiscal were lower than the flows in 2018-19 primarily due to the equity markets displaying volatility which made some investors take a break from making fresh equity investments.

According to the data, net inflows into equity funds, which also include equity-linked saving schemes (ELSS), were Rs 81,600 crore in the last fiscal as against Rs 1,11,858 crore in 2018-19.

Net inflows in these funds were Rs 1,71,069 crore in 2017-18, Rs 70,367 crore in 2016-17, Rs 74,024 crore in 2015-16 and Rs 71,029 crore in 2014-15.

However, they had witnessed a net outflow of Rs 9,269 crore in 2013-14.

Of the total inflow in the latest fiscal, investors poured Rs 11,485 crore in March, which was the highest level in the year. Also, they had invested Rs 10,730 crore in February, the highest level in 11 months.

This comes even as the broader market witnessed extreme volatility amid concerns over the impact of the coronavirus pandemic.

Himanshu Srivastava, senior analyst- manager research at Morningstar India, said extreme volatility in the stock markets on the back of the pandemic did not deter investors from investing into equity funds in February and March.

The assets under management (AUM) of equity MFs dropped to Rs 6.03 lakh crore at the end of March 2020 as against Rs 7.73 lakh crore in March 2019.

However, SIP (Systematic Investment Plan) contribution to the industry surged to over Rs 1 lakh crore from Rs 92,693 crore in 2018-19.

The industry, on an average, added 9.95 lakh SIP accounts each month during the last financial year, with an average ticket size of Rs 2,750.

Mutual funds are investment vehicles made up of a pool of funds collected from a number of investors. The funds are invested in stocks, bonds and money market instruments, among others.