Importance of mutual funds has increased in lockdown, says AMFI chief, reveals where people are investing

N. S. Venkatesh, Chief Executive Officer (CEO) at The Association of Mutual Funds in India (AMFI) says that the trend in mutual fund investment is positive and revealed that the total inflows are Rs 47000 cr in April 2021. He said that liquid funds and overnight funds are contributing nearly Rs 1 lakh cr in the month of April. He said that Equity flows continue to remain positive, last month also it was positive and this month also it is positive. He said that some people are taking Thematic Fund positions too. The Pharma sector is expected to do well because of Covid-19 issues. Hence, the Pharma sector funds are attracting more funds and seeing good inflows. So, Thematic Funds are doing well, he added.

Venkatesh said that there has been a Redemption of Rs 22000 cr in Fixed Term plans, the maturity in those plans are over, so people have withdrawn money from those plans. Overall, the trend is positive with Rs 46000 cr net inflow in April 2021. The total number of investors and folios has also gone up. He said that April was satisfactory for the Mutual Fund Industry.

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Venkatesh said that Investors are booking their profit as markets are at an all time high and putting their money out into Balance and Debt Funds after withdrawing from Equity Funds. He said that they are not investing outside the Mutual Fund Industry; they are investing in Liquid Funds, Short Duration funds or Debt Funds temporarily for some time.

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Venkatesh said that he believes that SIP Investments will continue to be in the range of Rs 8300 cr - Rs 8600 cr per month.  He said for the month of April, SIP Inflows were Rs 8500 cr. He said that some disruption is possible as SIP Flows is purely Retail. Many SIPs happen via offline mode, not everything is Digital, so some disruption is possible there due to lockdown in many areas.

Venkatesh said that it is good to attach Insurance as embedded or attached as a feature in a Fund either in SIPs or in any other Investments. He said that they will not have details of the claims made as it goes directly to the Insurance companies.  He said that they will not have the details, but it is a welcome feature as it helps investors in difficult times like these. It is good to see products being bundled up between Insurance Industry and Mutual Fund Industry and will help in the current situation of Covid-19.  

Venkatesh said that there is a marginal increase in the demand of such kinds of products but not a major shift towards those products. It is possible that if there is a good demand for these products over a period of time, then the sales may increase further with more offerings in Bundled products of Mutual Funds and Insurance.

Venkatesh said that Mutual Fund Investment is a long term investment and Investors have learned that apart from saving, one also needs to grow their money over a period of time. Hence, investment in Mutual Funds will continue strongly from here as well.