Mutual funds’ AUM in April at record high; cross Rs14-trillion mark

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Mumbai: Indian mutual funds’ assets under management (AUM) rose 15.3% to a record Rs.14.2 trillion in April, according to data released by the Association of Mutual Funds in India (Amfi) on Friday.

Inflows into liquid and money market schemes paced the increase in AUM. Net inflows in April totaled Rs.1.7 trillion across different categories.

Liquid and money market schemes saw Rs.1.3 trillion of inflows. These are the schemes where companies usually invest their surplus liquid funds.

“Inflows into liquid funds will continue. We will not see the numbers we saw in April again, but we will continue seeing net inflows,” said Ritesh Jain, chief investment officer at Tata Asset Management Ltd, said.

Others agreed.

“The month of March was a deficit month from a systematic liquidity point of view. At the (financial) year end, we saw redemptions in liquid funds, but the scene improved for liquid funds in April,” said Nilesh Shah, managing director of Kotak Mahindra Asset Management Co Ltd.

Equity schemes saw net inflows of Rs.4,438 crore, even as the BSE’s benchmark equity index rose by a mere 1%, indicating that retail investors seem to be returning after a temporary blip in March, when such schemes had seen a net outflow of Rs.1,370 crore.

According to Shah, flows into systematic investment plans (SIPs) for equity schemes were continuing to grow.

SIPs are investment vehicles offered by mutual funds that allow investors to park small amounts into their schemes at regular intervals instead of having to make lump-sum payments.

A recovery in company earnings could attract more inflows into equity schemes.

On 2 May, Mint reported that most of India’s top companies that had reported their March quarter financial results exceeded investors’ expectations, indicating that an earnings turnaround is gaining traction.

Mint analysis of 76 BSE 500 companies that reported their earnings by 29 April and for which comparable estimates were available had shown that 64.5%, or 49 of them, beat Bloomberg consensus estimates for net profit. For net sales, 48 or 63.2% of the firms under the review beat estimates.