Mutual Fund Equity Purchases Decline in April Amid Caution from Fund Managers
Mutual fund equity buying slows in April as fund managers turn cautious
Business Standard
Image: Business Standard
In April, mutual funds in India purchased equities worth approximately ₹26,000 crore ($3.1 billion USD), a significant decrease from the record ₹1 trillion ($12 billion USD) in March. This cautious approach comes despite steady inflows into active equity schemes, influenced by geopolitical tensions and the earnings season.
- 01Mutual funds purchased equities worth ₹26,000 crore in April, down from ₹1 trillion in March.
- 02Net inflows into active equity schemes are expected to exceed ₹35,000 crore in April.
- 03Geopolitical tensions and the earnings season prompted a cautious stance among fund managers.
- 04The Nifty 50 index rose 8.3% in April following a decline in March.
- 05Cash holdings of equity schemes fell to a 21-month low of 4.7%.
Advertisement
In-Article Ad
In April, mutual funds in India adopted a cautious approach to equity markets, purchasing equities worth approximately ₹26,000 crore ($3.1 billion USD) as of April 28, a significant decline from the record ₹1 trillion ($12 billion USD) in March. Despite this moderation, net inflows into active equity schemes remained steady, with estimates suggesting inflows could exceed ₹35,000 crore ($4.2 billion USD) for the month, compared to ₹40,450 crore ($4.9 billion USD) in March. The shift in investment behavior is attributed to geopolitical tensions, particularly surrounding the Middle East, and the start of the earnings season, which has led fund managers to adopt a 'wait and watch' strategy. The Nifty 50 index rose by 8.3% in April, recovering from an 11% decline in March. Fund managers are mandated to stay largely invested but can hold cash for future opportunities, resulting in a drop in cash holdings to a 21-month low of 4.7%.
Advertisement
In-Article Ad
The cautious investment approach by mutual funds may impact market liquidity and stock price movements, affecting investors and traders in the Indian equity market.
Advertisement
In-Article Ad
Reader Poll
Do you think mutual funds should adopt a more aggressive investment strategy?
Connecting to poll...
More about Securities and Exchange Board of India
RBI Urged to Deny Tata Sons' License Surrender Amid Regulatory Changes
Mint • May 1, 2026
PPFAS Mutual Fund and 15 AMCs Introduce Voluntary Lock-in Facility for Investors
The Economic Times • May 1, 2026
India's Digital Gold Sector Moves Towards Regulation Amid Rapid Growth
The Economic Times • May 1, 2026
Read the original article
Visit the source for the complete story.