New Delhi- Indian equity markets witnessed a strong rebound in investor inflows during April, with systematic investment plan (SIP) contributions continuing to favour large-cap funds, according to a report by Vallum Capital.
The report stated that Indian equities received inflows of Rs 73,639 crore in April, significantly higher than the previous month. Investors largely shifted toward value-driven opportunities in PSU and BFSI stocks, while reducing exposure to technology shares.
It added that until the broader equity market turns positive on a year-to-date (YTD) basis, investors are likely to remain cautious and disciplined rather than aggressively chasing returns.
April allocations stood at Rs 25,931 crore, showing a clear improvement over March, which had witnessed quarter-end disruptions across asset classes. The report noted that both money market and fixed-income categories recovered from heavy outflows during the period, indicating a return to normal investment patterns.
Large-cap funds continued to remain the preferred investment destination despite a moderation in inflows. Investments in the category stood at Rs 17,756 crore in April, down by Rs 10,911 crore compared to March. Even with an 8 per cent negative YTD performance — the weakest among major segments — investors continued allocating money through SIPs.
According to the report, this trend reflects the growing maturity of India’s SIP culture, where investors continue systematic investments even during periods of underperformance instead of pulling money out.
Among equity categories, dynamic strategies witnessed the sharpest turnaround. The segment moved from outflows of Rs 15,242 crore in March to inflows of Rs 19,755 crore in April. The report attributed much of this reversal to arbitrage funds, which alone contributed Rs 33,173 crore as institutional positions were unwound.
In the factor investing segment, Growth emerged as the only category delivering positive returns, posting gains of 2.2 per cent in April and 2.9 per cent on a YTD basis. The category also saw fresh inflows worth Rs 1,022 crore.
Meanwhile, Focused Funds recorded the steepest decline in investor interest, witnessing outflows of Rs 1,008 crore.
Despite underperformance across several themes, the BFSI segment continued to attract strong investor inflows. Within the category, Capital Markets delivered the best performance, generating 18.1 per cent returns on a YTD basis and 7.4 per cent gains over the month, backed by rising investor confidence and participation.
With inputs from IANS