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Equity mutual funds (MFs) capped a strong 2024 with near-record inflows in December. With net inflows of Rs 41,156 crore in December, the 2024 tally surged to Rs 3.9 trillion, up 144 per cent compared to 2023.
The December tally, which was only slightly short of the record-high inflows of Rs 41,887 crore achieved in October 2024, was fuelled by record inflows of Rs 9,761 crore into small-cap and mid-cap funds.
The sectoral and thematic fund category, which witnessed the closing of 12 new fund offerings (NFOs) in December, contributed Rs 15,332 crore to the equity inflow tally, according to data from the Association of Mutual Funds in India (Amfi).
"The MF industry witnessed strong demand for equity funds, particularly small-cap and sectoral/thematic funds. The inflows were further buoyed by inflows from new fund offers, with passive funds leading the charge," said Akhil Chaturvedi, executive director and chief business officer, Motilal Oswal AMC.
The inflows rose despite the equity market correcting and ending in the red for the third month in a row. The benchmark Nifty50 declined 2 per cent during the month.
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"Equity MFs have seen very strong flows across categories, and investors seem to have bought into the market correction in December," said Anand Vardarajan, chief business officer, Tata AMC.
Inflows into mid-cap funds rose to a record high of Rs 5,093 crore in December, while small-cap funds saw the second-highest monthly inflows at Rs 4,668 crore.
The inflows were also supported by Rs 26,459 crore received through the systematic investment plan (SIP) route. The SIP inflows achieved a new high for the 17th time in 18 months.
"Despite volatile market conditions, equity-oriented schemes continued to see strong inflows, reflecting investors’ confidence and commitment to staying invested for the long term. This behaviour highlights the growing maturity of investors. The SIP contribution reached an all-time high of Rs 26,459 crore in December 2024, reflecting investors' steadfast commitment to their financial goals," said Venkat Chalasani, chief executive, Amfi.
"Despite market volatility, SIP numbers have remained strong, reflecting retail investor confidence in long-term investments in India. The near 50 per cent growth in SIPs over the past year is a testament to the strong conviction of investors," said Suranjana Borthakur, head of distribution and strategic alliances, Mirae Asset Investment Managers (India).
Debt funds registered Rs 1.3 trillion in outflows, in line with the trend seen at the end of every quarter. According to experts, the decline is due to redemptions by institutional investors to make tax payments and meet other requirements.
The debt fund outflows and a sharp decline in passive fund inflows led to a net outflow of Rs 80,355 crore at the industry level. The redemptions and mark-to-market losses in equity and hybrid funds resulted in a 1.7 per cent month-on-month decline in assets under management to Rs 66.9 trillion.
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