Mutual fund (MF) inflows into equities declined 10% in September to Rs 34,419.26 crore as investments into large-cap and sectoral/thematic funds cooled off from August. However, the overall contribution of systematic investment plans (SIPs) rose by over 4% to Rs 24,508.73 crore, an all-time high.
September marked 43 consecutive months of equity inflows, taking the net assets under management (AUM) of equity funds to Rs 31.1 lakh crore. The overall mutual fund industry’s AUM surpassed Rs 67 lakh crore, data from the Association of Mutual Funds in India (AMFI) show.
“The consistent inflow of investments reflects the increasing trust and confidence in mutual funds. The industry’s continued diversification into various product categories and innovative offerings is driving growth and providing investors with a wider range of options to meet their diverse financial goals,” said Venkat Chalasani, chief executive, AMFI.
The latest data highlighted the rising investor interest in mid-cap funds. While inflows into the large-cap funds and small-cap funds saw a decline, the same for mid-cap funds rose 2.5%. Even the large and mid-cap funds saw a 9.2% jump in inflows during the month.
Melvyn Santarita, analyst – manager research at Morningstar Investment Research India, pointed out that inflows into the mid-cap category at Rs 3,130.42 crore was the highest ever recorded in a month, surpassing the previous best of Rs 3,054 crore seen in August.
Even as the large-cap category saw a relatively sharp drop in inflows to Rs 1,769.42 crore in September, they were significantly higher compared with recent trends, experts pointed out.
“There has been a re-emergence of net inflows in the large-cap category. With the large-cap segment faring relatively better from the valuation point of view, investors would have focused their attention towards this category,” Santarita said. He added that the heightened volatility observed in the market in recent times could also have pushed some funds to large-caps, given they add stability to the portfolio.
The benchmark Sensex rose 2.4% in September, while the BSE Smallcap index and the BSE Midcap index slightly underperformed with 2% and 0.6% returns, respectively.
Akhil Chaturvedi, executive director and chief business officer of Motilal Oswal AMC, said, “Given where the valuations are placed, there has been a slight slowdown in equity inflows…Multi-cap funds attracted increased investments, reflecting a shift towards more diversified portfolios.”
Multi-cap funds registered a 42% jump in inflows to Rs 3,508.88 crore during the month.
Meanwhile, sectoral/thematic schemes continued to attract the highest inflows among equity funds at Rs 13,254.63 crore with continued push from new fund offers.