Inflows into largecap MFs up 731% in a yr, sectoral funds see 289% growth

The Indian mutual fund industry has witnessed an over 135 per cent surge in net inflows and nearly 39 per cent growth in net AUM (Assets under Management) over the last one year.

 The Indian mutual fund industry, which has witnessed an over 135 per cent surge in net inflows and nearly 39 per cent growth in net AUM (Assets under Management) over the last one year, is likely to witness a multi-fold growth in the coming years with India being in a bright spot in the global economy, said ICRA Analytics in a note. 

 

 Total inflows into the mutual fund industry grew by 135.38 per cent at Rs 60,295.30 crore in November 2024, as against Rs 25,615.65 crore in November 2023. Interestingly, the net AUM which was at Rs 49.05 trillion in November last year, crossed the historic milestone to touch Rs 68.08 trillion in November 2024.

 

 

Higher inflows to sustain

 

While all funds witnessed  growth, inflows into largecap funds under equity category were the highest, registering a surge of nearly 731 per cent at Rs 2547.92 crore in November 2024 as against Rs 306.70 crore same period last year. 

 

Inflows into sectoral/thematic funds grew by 289.77 per cent at Rs 7657.75 crore; flexi cap by 204.88 per cent at Rs 5084.11 crore; large and midcap by 153.31 per cent at Rs 4679.74 crore and value/contra fund by 66.79 per cent at Rs 2088.01 crore. In terms of AUM, sectoral/thematic funds witnessed the maximum growth of 94.78 per cent at Rs 4.62 trillion; large and midcap by 54.25 per cent at Rs 2.68 trillion; flexi cap by 42.13 per cent at Rs 4.35 trillon and small cap by 48.24 per cent at Rs 3.26 trillion.  

Inflows into Growth/Equity oriented schemes 

   

The share of open-ended equity oriented mutual funds to the total AUM increased to 44.59 per cent at Rs 30.36 trillion in November 2024, up from 41.46 per cent in November last year indicating the growing confidence among retail investors in the mutual fund ecosystem. 

 

Total inflows into equity mutual funds increased by 131.35 per cent at Rs 35,943.49 crore in November 2024, as against Rs 15,536.42 crore last year. Since the beginning of calendar year 2024, inflows into equity mutual funds were up by 65.03 per cent from Rs 21,780.56 crore in January 2024.

 

Number of new SIPs registered increased to 49.47 lakh at the end of November 2024, as against 30.80 lakh in November 2023. The SIP AUM stood at Rs 13.54 trillion in November 2024, as against Rs. 9.31 trillion  in 2023. Overall net inflows stood at Rs 9.14 trillion from January 2024 to November 2024, as against Rs. 2.74 trillion in 2023 which tantamount to a growth of 233%.

 

With 2024 on the close and 2025 on the horizon, markets are witnessing intermittent bouts of volatility. Sluggish growth, rising tendencies of protectionism and geopolitical uncertainty are some of the factors which have weighed on the markets and contributed to market jitters. However, amidst the headwinds, domestic mutual fund industry has showcased resilience backed by a sense of optimism regarding the growth prospects of the Indian economy, strong participation from retail investors, broadening investor base and growing interest and awareness among investors from smaller cities regarding mutual funds.

 

“Markets may witness some short-term volatility in the near term due to higher valuations, tensions in the Middle East and volatility in global crude oil prices. However, market corrections may be seen as opportunities to invest as it is essential to focus on long term sustainable growth. With the structural growth story of the Indian economy remaining intact and India a bright spot in the global economy, the domestic mutual fund industry is expected to witness multi-fold growth in the coming years,” Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics, said.

 

Small cap and mid cap funds, which have witnessed a steady surge in AUM, are also likely to hold investor interest in the medium to long term, due to the value created in the entities backed by robust regulatory framework leading to better corporate governance practices and the government’s firm intent to push for an intrinsic growth in the country’s economy, added the note by Icra Analytics.

 

There has also been a heightened activity in theme-based funds, particularly those relating to infrastructure, healthcare and IT.

 

 “Investors, particularly in the retail segment, are seeking new growth opportunities and are exploring avenues to generate alpha or higher returns. This explains the heightened activity in sectoral/thematic funds in the last few years. However, such funds are suitable for those investors who understand the dynamics of specific sectors or themes and can accordingly evaluate their growth prospects and risk-taking ability effectively. It is imperative that investors stay updated about the latest market trends and economic developments and take well-informed investment decisions,” said Kumar.