By comparison: In March, investors only sold ₹6 279.23 crore units – the month with the highest withdrawal, as companies sold their investments in debt and cash at the end of the year.
In April, however, investors switched to other investment fund categories as further interest rate cuts are expected, leading to an increase in total assets under management.
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The funds of debt, whose output in March was ₹1.94 trillion, received a total inflow of ₹43.431.55 crores in April, mainly in the form of liquidity plans, corporate bond funds, bank and GMP funds, demand deposits and gold funds, the Mutual Investment Funds Association of India (Amfi) said Friday.
In the current low inflation scenario, which is expected to lead to a relaxation of the interest rate regime, there will be increased interest rates in fixed income systems in the investment fund industry, according to Amfi N.S. Venkatesh’s CEO Amfi N.S. Venkatesh in his statement.
Other categories of debt funds with outflows are medium-term credit funds (₹6 SEK 363.53), short-term credit funds (₹2 SEK 309.05), money market funds (₹1 SEK 210.35), low-income funds (₹6 SEK 841.07) and very short-term credit funds (₹3 SEK 419.32).
Repayment of the debt slowed down after the Reserve Bank of India announced credit support for investment funds from ₹50 000 crores, Venkatesh said. The stability of the ransom indicates that investor confidence in these systems is returning, he said.
At the same time, net inflows of funds into investment funds have slowed sharply, as an extended national embargo threatens to have far-reaching consequences for business and the economy. According to Amfi, cash inflows into equity compensation plans, including Equity Linked Savings Plans (ELSS), reached a four-month low in April at ₹6 411.88 Crore, down 47.3% month-on-month, but still 28.5% higher than a year ago.
In April, however, share buy-back programmes were weakened: ₹8 104.46 crore, 54.8% lower than in March, while this figure was 37.1% lower than in the same period last year.
The cash inflow from investment plans in the system fell slightly in April to ₹8 376.11 crore, compared to ₹8 641.20 crore the previous month. However, the total number of SIP accounts increased from 31.2 million at the end of March to 31.4 million at the end of last month.
The SIP makes it possible to invest fixed amounts in investment fund programmes at certain intervals.
We expected her to slow down. In March, while market corrections took place, we may have seen opportunistic buying by investors, but in general, investors are cautious about the weak economy and market sentiment and so will be coming for some time to come, said Achil Chaturvedi, Deputy Director and Head of Sales and Distribution at Motilal Oswal Asset Management Co.
But April was a relief for the fairs: Core indices have risen by more than 14%, the best monthly indicator since September 2009. The strong recovery has taken place despite the dangers of an impending global recession and expectations of slower economic growth. But even after Sensex and Nifty reached more than 20% of their lows in March, they didn’t come out of the downward zone.
Thanks to individual debt funds, total assets under management of the mutual fund industry increased by 7.5% from ₹22.26 trillion dollars a year ago to ₹23.93 trillion dollars.
According to D.P. Singh, executive director of the BMI-SBI investment fund, the main reasons for the slowdown in capital flows are the uncertainty of the economy and the expectation of weak business performance for the rest of the year.
The blockade led to a sharp drop in market prices, reducing investor confidence. Capital inflows may be lower until there is a clear picture of future measures and the functioning of the different sectors. In the current environment, investors avoid new capital investments until a clearer picture emerges, he said.