Mutual Funds: Equity fund inflows up by 17% to new high Rs 40,608 cr in June, thematic funds new favourites

AMFI June data: Equity mutual funds saw an inflow of Rs 40,608.19 crore in June, which is 17% higher and is a new high for the segment. According to the latest Association of Mutual Funds of India (AMFI) data, the monthly inflow in May was Rs 34,670.9 crore. The 17% hike is mainly due to investment in various fund categories, like sectoral and thematic funds. These funds saw inflows worth Rs 22,351 crore. 

In June, large cap funds saw inflows of Rs 970.5 crore as compared to Rs 663 crore in May. The small cap funds saw inflows of Rs 2,263 crore, a decrease from Rs 2,724.7 crore in May. Mid Cap Funds saw inflows of Rs 2,528 crore, which was less than from Rs 2,605.7 crore in May.

Assets under management (AUM) of the mutual fund industry rose to hit Rs 61.16 lakh crore in June, data showed. Meanwhile, debt mutual funds saw net outflows of Rs 1,07,357.62 crore during the month. Overall open-ended mutual funds saw net outflows of Rs 43,108.80 crore during the month. All equity mutual funds witnessed inflows across most categories in June, except for ELSS and focused funds, which experienced outflows for the third consecutive month.

Assets under management (AUM) of the mutual fund industry reached Rs 61.16 lakh crore in June. However, debt mutual funds experienced net outflows of Rs 1,07,357.62 crore, while open-ended mutual funds saw net outflows of Rs 43,108.80 crore during the same period. The inflows into open-ended equity funds are in the positive zone for the 40th month in a row.

The debt mutual funds saw an outflow of Rs 1.07 lakh crore in June with maximum outflows recorded in liquid funds. The liquid funds saw an outflow of Rs 80,354 crore in June against an inflow of Rs 25,873 crore in May. Exchange Traded Funds (ETFs) recorded inflows of Rs 9,134 crore, down from Rs 10,690 crore in May.

“Currently, the Indian equity market appears to be fairly valued, with significant growth potential in both large-cap and small-cap segments. Recent data from June 24 indicates a notable increase in inflows into large-cap and mid-cap categories over the past two months. Additionally, the contra or value category has attracted strong inflows, signaling investor confidence in these segments. Conversely, while sectoral and thematic investments experienced high inflows earlier in June, their growth has recently slowed. Notably, despite leading in inflows over the past year, small-cap investments have seen a moderation in investor interest this month,” said Feroze Azeez, Deputy CEO, Anand Rathi Wealth Limited. 

SIP inflows in June stood at Rs 21,262 crore, up 1.7% from Rs 20,904 crore in May.

In June, approximately 17 open-ended New Fund Offers (NFOs) were introduced, raising a total of Rs 15,227 crore. The sectoral/thematic funds made the largest contribution, amounting to Rs 12,974 crore. Additionally, there were nine new sectoral funds launched during the same period.

Source: Reuters

“Bulk of the mutual fund flows went to small- and mid-caps from large-cap funds over the last two years, as investors chased performance,” said Harsha Upadhyaya, chief investment officer and president at Kotak Mahindra Asset Management.

However, valuation excesses have been more in small- and mid-caps over large-caps, which is now forcing investors to diversify their allocations to large- and multi-cap funds, Upadhyaya added.

“We have observed consistent positive inflows in equity schemes since April 2021. I believe India is one of the fastest growing economies in the world. There will be a huge wealth creation opportunity in coming 5-7 years. This will lead to significant growth of upper middle-class, HNI & ultra HNI population. Mutual fund is one of the preferred, transparent & cost-effective investment products in India and is well accepted by retail investors. The trend is positive for Mutual fund industry future growth. There are chances that Industry will cross milestone of Rs 100 lakh crores AUM by 2030,” said Hitesh Thakkar, Acting CEO, ITI Mutual Fund.

“SIP numbers are hitting peaks every month, accumulating a stellar Rs 21,260 crore. This strengthens the fact that Indian investors are resilient and are participating in the long-term growth of the market. The overall market behaviour supported by numbers suggests that investors are strategically positioning themselves with cautious yet optimistic approach for long-term growth,” Azeez added.

First 6 months

In the calendar year 2024, equity mutual funds recorded an inflow of Rs 1.65 lakh crore. In the first half of 2024, sectoral funds attracted a substantial inflow of Rs 70,716 crore. Next one is multi cap funds received notable inflows amounting to Rs 17,357 crore during the same period. Additionally, focused funds experienced a considerable influx of Rs 1,592 crore in the first half of 2024, highlighting a diverse range of investment preferences among investors.


Source link

Leave a comment