Mutual Fund Inflows Witness a Decline
The mutual fund industry experienced a significant slowdown in February, with equity mutual fund inflows dropping by 26 percent compared to the previous month. According to data released by the Association of Mutual Funds of India (AMFI) on March 12, inflows stood at Rs 29,303.34 crore, down from January’s figures. Additionally, systematic investment plan (SIP) inflows fell to Rs 25,999 crore, marking a three-month low. The decrease in inflows comes as the broader market faced a selloff, influencing investor sentiment. Despite the decline, industry experts highlight that the market has maintained positive inflows for 48 consecutive months, indicating continued investor trust.
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HDFC AMC Faces Market Pressure
Reflecting the broader trend in mutual fund investments, shares of HDFC AMC Ltd extended their losses, falling by up to 3 percent in Thursday’s trading session. The stock reached an intraday low of Rs 3,660 per share, continuing its downward trend for the second consecutive session. Similarly, UTI Asset Management Company also experienced selling pressure, declining by 0.39 percent to Rs 938.70 per share on the National Stock Exchange (NSE) as of 10:40 AM. Analysts suggest that while the decline in equity inflows has impacted the market, large-cap funds have remained relatively stable, reflecting investor preference for lower-risk investments during volatile periods.
Impact on Systematic Investment Plans
The decline in mutual fund inflows has also affected assets under management (AUM) through systematic investment plans. As per AMFI data, the total AUM via SIPs dropped to Rs 12.38 lakh crore in February from Rs 13.20 lakh crore in January. This reduction is attributed to a mark-to-market (MTM) impact, which has influenced the overall valuation of investments. While SIP contributions have moderated, financial experts believe that long-term investor confidence remains intact, and the market is expected to recover as stability returns. Market participants continue to monitor investment trends closely, anticipating potential shifts in investor strategies in the coming months.
