Rs 40 Lakh Crore Inflow in Equity SIPs Reflects Confidence of Indian Retail Investors in FY23
Mutual Fund Inflows Jump 7% to Reach Rs 40.05 Lakh Crore in FY23, According to AMFI Data
Fund Inflows
The Association of Mutual Funds in India (AMFI) has reported a 7% increase in mutual fund inflows, reaching Rs 40.05 lakh crore in the recently ended financial year 2022-23.
This marks a significant increase from the previous fiscal year’s inflow of Rs 37.70 lakh crore.
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AMFI’s data also revealed that sectoral/thematic schemes received the highest inflows at Rs 3,929 crore in March, while net equity inflows for the same month stood at Rs 20,534 crore.
Notably, the month saw investments via systematic investment plans (SIPs) top the Rs 14,000 crore mark for the first time ever.
Index Mutual Funds
Index funds were the biggest contributors in this category, with inflows of nearly Rs 27,228 crore, attributed to their low-cost structure.
However, hybrid net outflows in March came in at Rs 12,372 crore, compared to inflows of Rs 460.30 crore in February.
Debt Mutual Funds
The debt category saw a shift in investor focus towards long duration funds, following the introduction of changes to mutual fund taxation in the Finance Bill.
This led to significant outflows from debt and hybrid funds, with open-ended mutual funds experiencing overall net outflows of Rs 21,693.91 crore in March.
The amendments to the Finance Bill mean that capital gains from investments in mutual funds with less than 35% invested in domestic equities will be taxed at a maximum marginal rate, eliminating the benefits of long-term capital gains and indexation for debt mutual funds.
As a result, the highest net outflows were seen in liquid funds, which saw net selling of Rs 56,924.13 crore in March.
Corporate Bond Funds saw the highest net inflows in the debt category, with buying to the tune of Rs 15,626.16 crore.
However, arbitrage funds emerged as the biggest losers, experiencing a net outflow of Rs 12,157 crore last month.
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Overall, despite the changes in taxation, mutual fund inflows have remained strong, and SIP investments have continued to gain popularity among investors.
