Mutual Funds See Highest-Ever Inflows In April, SIPs Continue Record Streak

The mutual fund industries' net asset under management rose in April after a fall in the previous month, despite the confusion created for the industry by the new know-your-customer rules, which kicked in on April 1.

Net flows recorded an inflow of Rs 2.39 lakh crore, led by debt schemes. This inflow compares to an outflow of Rs 1.59 lakh crore in March that was seen due to the seasonal factor.

Market was expecting a likely impact in the inflows as a large number of investors faced challenges in transacting after the KYC norms were changed. Mutual fund investors were asked to update or redo the KYC process with officially valid documents, particularly the Aadhaar.

The concerns about regularising the KYC got slightly overstated, according to Aashish Somaiyaa, chief executive officer of WhiteOak Capital Asset Management. "I think at any point in time, about 70% of investors KYC are validated, but in reality, one should be looking at the number of transactions."

Throughout the month, about 97–98% of all transactions have gone through, Somaiyaa said.

Net investment into equity and equity-linked schemes declined 16% over the previous month to Rs 18,917.1 crore in April, according to data released by the Association of Mutual Funds in India on Thursday.

Small-cap funds registered inflows of Rs 2,208.7 crore in April compared with Rs 94.2-crore outflows in March. Large-cap schemes saw inflows of Rs 357.6 crore against Rs 2,127.8-crore inflows in the last month.

Mid-cap schemes received Rs 1,793.1 crore, compared with Rs 1,017.7 crore in March. Inflows into multi-cap funds stood at Rs 2,723.8 crore against Rs 1,827.5 crore.

Liquid funds, used by corporates to park short-term cash, saw an inflow of Rs 1.02 lakh crore compared with outflows of Rs 1.57 lakh crore in the previous month.

Credit-risk funds reported Rs 358.9-crore outflows. These schemes recorded outflows of Rs 321.1 crore in March. Money-market fund inflows stood at Rs 34,084.1 crore in April against an outflow Rs 8,719.8 crore in March.

The debt-oriented funds witnessed an inflow of Rs 1.89 lakh crore in April against Rs 1.98 lakh crore of outflow in the previous month.

Systematic Investment Plans' contribution to the mutual funds industry reached a new peak, standing at a record Rs 20,371 crore in April, compared with Rs 19,271 crore in March.

Overall, there was a net inflows of Rs 2.39 lakh crore across debt and equity schemes in April, compared to Rs 1.59 lakh crore outflows in the previous month.