The mutual fund industry witnessed a mixed bag of fortunes in July 2024, with a surge in Systematic Investment Plans (SIPs) contrasting with a decline in equity fund inflows.
Despite a 9 per cent dip in overall equity mutual fund inflows to Rs 37,113 crore in July, the industry recorded a significant milestone with SIP contributions crossing the Rs 23,000 crore mark for the first time, as per the latest data from AMFI.
While large-cap and mid-cap funds experienced a slowdown in inflows, the small-cap and multi-cap segments continued to attract investor interest. Sectoral funds, though witnessing a decline from the previous month, still garnered substantial inflows, reflecting investor enthusiasm for thematic opportunities.
The total assets under management (AUM) of MFs rose 6% to Rs 64.69 lakh crore in July against Rs 60.89 lakh crore in June.
The sectoral funds, which continued to witness an increase in inflows for three consecutive months, witnessed an 18% decline in inflows in July. The category received an inflow of Rs 18,386 crore in July against inflows of Rs 22,351 crore in June. There were nine new fund offers (NFOs) in the Sectoral/Thematic Fund category, via which schemes garnered a total of Rs 12,974 crore during the month.
Inflows into large-cap funds were down 31 percent to Rs 670.12 crore. Small-cap funds saw net inflows of Rs 2,109.20 crore and mid-cap funds saw Rs 1,644.22 crore.
Multi-cap funds, which invest at least 25 percent each in large-cap, mid-cap and small-cap stocks, witnessed 50 percent higher inflows at Rs 7,084.61 crore.
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Debt funds make a comeback
The debt fund category staged a strong recovery after facing outflows in June. Liquid funds emerged as the top performers, attracting inflows of Rs 70,060 crore. Money market funds also witnessed significant inflows, totaling Rs 28,738 crore. However, certain segments like medium duration funds, credit risk funds, and gilt funds with 10-year constant maturity faced outflows. Out of 16 debt MF categories, 12 received inflows in July.
"In July 2024, the industry AUM reached Rs 64.97 lakh crore as against Rs 61.16 lakh crore in June 2024, an increase of Rs 3.18 lakh crore, out of which Equity AUM increased by Rs 2.37 lakh crore. The major net inflow of Rs 18,386 crore was in Hybrid category. We feel retail investors are now understanding that volatility is part of long-term wealth creation journey. The share of financial assets has been increasing rapidly and within financial assets, mutual fund market share is relatively high," said Hitesh Thakkar, Acting CEO, ITI Mutual Fund.
Open-ended equity mutual fund inflows slipped 8.61 percent to Rs 37,113.39 crore in July due to a fall in investments in large-cap and mid-cap funds while inflows into open-ended equity funds have remained in the positive zone for the 41th month in a row.