Equity mutual funds continued their positive momentum with inflow of Rs 26,866 crore in February, making it the highest monthly infusion in 23 months, driven by massive interest for thematic funds and launch of new fund offerings (NFOs).
Also, the latest flow was about 23 per cent higher than inflows of Rs 21,780 crore in January.
Moreover, monthly Systematic Investment Plan (SIP) contributions reached a fresh high of Rs 19,186 crore, surpassing January’s Rs 18,838 crore, according to the data released by Association of Mutual Funds in India (AMFI) on Friday.
“As we delve into the Feb 2024 data, we observe that there is a surge in SIP accounts, totalling 8.20 crore with 49.79 lakh new SIP registrations. This underscores investors’ unwavering commitment to disciplined wealth accumulation,” Venkat Chalasani, Chief Executive, AMFI, said.
Overall, the mutual fund industry witnessed an inflow of Rs 1.2 lakh crore in February, almost similar to the one seen in the preceding month. The huge inflow was driven by contributions from debt-oriented schemes at Rs 63,809 crore, equity schemes at Rs 26,866 crore and hybrid schemes at Rs 18,105 crore.
The strong inflow has pushed the net assets under management to Rs 54.54 lakh crore at February-end from Rs 52.74 lakh crore in the preceding month.
The flow in February this year was the highest since March 2022, when equity-oriented mutual funds witnessed an inflow of Rs 28,463 crore. Also, the latest flow marks the 36th consecutive month of net inflows in equity funds. The equity segment was also aided by eight new fund launches during the month which cumulatively garnered Rs 8,692 crore, Melvyn Santarita, Analyst, Morningstar Investment Research India, said.
Anand Vardarajan, Business Head, Banking, Institutional Clients, Alternate Products and Product Strategy, Tata Asset Management said that equity inflows continue to soar largely led by some NFOs. Notably thematic/sectoral have seen massive interest.
Barring focused funds, which saw an outflow of Rs 533 crore, all categories experienced inflow in equity segments.
The sectoral or thematic funds category saw the highest inflows to the tune of Rs 11,263 crore. This was followed by large & midcap category with a net attraction of Rs 3,157 crore, small cap (Rs 2,922 crore) and mid cap (Rs 1,808 crore).
However, inflows in small cap and mid-cap dropped by 10 per cent and 12 per cent, respectively in the preceding month possibly due to investors opting to book profits on the back of a sharp uptick in the performance of these categories.
Interestingly, the large cap category saw its third highest flows in 20 months to Rs 921 crore in February.
Apart from equities, debt-focused funds attracted net inflows totalling Rs 63,809 crore in February, marking the second consecutive month of positive inflows. In January, these funds experienced a surge of Rs 76,469 crore.
Within the open-ended category, liquid funds received the maximum inflows, followed by Corporate Bond Fund and Short Duration Fund suggesting a notable preference for these investment options among investors in February.
“After fulfilling the advance tax payments in December 2023, corporates had likely directed excess investible money in liquid funds for a short period, thereby leading to huge inflows in last two months,” Nehal Meshram, Senior Analyst, Manager Research, Morningstar Investment Research India, said.
Liquid funds recorded net inflows of Rs 83,642 crore and Corporate Bond funds saw net inflows of Rs 3,029 crore.
Also, the quantum of net flows in Gold ETFs (Exchange Traded Funds) saw a sharp uptick to Rs 997 crore during the month under review from Rs 657 crore in January.
