Equity mutual fund inflows decline 14% to Rs 35,943 crore in November

Slowed by declines in lump sum investments and new fund offering performance

Equity mutual fund (MF) inflows moderated in November, weighed down by a decline in lump sum investments and new fund offering collections.

 

Active MF schemes received Rs 35,943 crore in November, down 14 per cent from the all-time high inflow of Rs 41,887 crore in October.

 

“There was heightened volatility due to various macroeconomic factors, geopolitical events, and US election results. This led to investors opting for a wait-and-watch approach for big-ticket investments, resulting in a decline in lump sum flows and flat systematic investment plan (SIP) numbers,” said Akhil Chaturvedi, executive director and chief business officer, Motilal Oswal Asset Management Company.

 

 

The November tally is still higher than the average inflows for calendar year 2024, thanks to elevated SIP contributions. Last month, SIPs brought in Rs 25,320 crore compared to Rs 25,323 crore in October.

 

“The market correction during the month provided a good investment opportunity, which investors capitalised on. This marked the 45th consecutive month of net inflows into the segment. Though lower than the previous month, it was still a big number,” said Himanshu Srivastava, associate director — manager research, Morningstar Investment Research India.

 

In November, the market continued with October’s downward momentum but made a comeback in the latter half of the month. The benchmark indices, Nifty 50 and Sensex, ended the month almost flat.

 

The month-on-month decline in equity fund inflows can largely be attributed to the sharp fall in investments in sectoral and thematic funds. The tally dropped from Rs 12,279 crore in October to Rs 7,658 crore in November. 

 

Most other categories saw little change in their monthly collections. Flexicap schemes received Rs 5,000 crore for the second straight month. Large and midcap funds also garnered over Rs 4,500 crore for the second month in a row. Inflows into smallcap funds remained elevated at Rs 4,112 crore.

 

“Small and midcap schemes continue to dominate investor interest, capturing 25 per cent of total equity inflows. Midcap schemes, in particular, achieved all-time high monthly inflows. Despite more attractive valuations in largecap stocks, the flow into these schemes remains lacklustre at Rs 2,500 crore,” said Nuvama Alternative & Quantitative Research.

 

Overall, the MF industry recorded net inflows of Rs 60,295 crore in November. Debt funds were the second-largest contributors with Rs 12,916 crore in inflows. Passive schemes and hybrid funds received inflows of Rs 7,061 crore and Rs 4,124 crore, respectively.

 

The inflows and mark-to-market gains in some categories pushed the assets under management of the MF industry past the Rs 68 trillion mark for the first time in November.

 

“Defying a tumultuous month in the equity market, the MF industry’s assets reached a new pinnacle of Rs 68.08 trillion, driven primarily by robust inflows into equity-oriented schemes. The unwavering monthly SIP inflows remained above Rs 25,000 crore in November, showcasing investors’ long-term vision and commitment to their financial goals despite short-term market fluctuations,” said Venkat Chalasani, chief executive of the Association of Mutual Funds in India.

 

Data released by the association shows that while SIP inflows remained in line with October’s collection, new registrations dropped to 4.9 million from 6.4 million.