67% of equity MFs outperformed respective benchmarks in August 2024, PL Wealth study finds

PL Wealth Management, Prabhudas Lilladher’s wealth management division, released its latest report analysing the performance of mutual funds, highlighting a steady rise in assets under management (AUM) for equity mutual funds. The study revealed that the AUM of equity mutual funds increased sequentially by 2.04 per cent in August 2024, reaching ₹25,64,069 crore, up from ₹25,12,846 crore in July 2024. The report also shed light on the performance of various mutual fund categories, indicating that a substantial number of schemes had outperformed their benchmarks during this period.

Study Insights

The analysis, which reviewed 283 open-ended equity diversified funds, showed that 67 per cent of these mutual funds managed to outperform their respective benchmarks in August 2024. In total, 190 funds outperformed during this period, reflecting robust performance across several categories.

Among the top performers, Large & Mid Cap Funds emerged as the best-performing category, with 79 per cent of schemes outperforming their respective benchmarks. Focused Funds followed closely, with 75 per cent of schemes surpassing their benchmarks. Additionally, Multi Cap, Mid Cap, and Flexi Cap funds all demonstrated strong performance, with 69 per cent of schemes in each category outperforming their respective benchmarks. Equity-linked Savings Schemes also witnessed 68 per cent outperformance in August, whereas 63 per cent of Value Contra Div Yield Funds outperformed benchmarks.

However, not all fund categories delivered equally impressive results. The report highlighted that Large Cap Funds lagged behind, with only 55 per cent of funds in this category outperforming their benchmarks. This made Large Cap Funds the weakest performers among the analysed segments.

August Mutual Fund Data

The mutual fund industry saw a 43 per cent decline in net inflows in August 2024, falling to ₹1.08 lakh crore from ₹1.89 lakh crore in July. According to AMFI data, this drop was primarily driven by a 62 per cent fall in debt mutual fund inflows.

Equity mutual funds, however, recorded a 3 per cent increase, with inflows rising to ₹38,239 crore, even amid a subdued equity market. SIP contributions also hit a record ₹23,547 crore, surpassing July’s ₹23,332 crore.

Large-cap funds saw a significant 293 percent rise in inflows to ₹2,636 crore, while mid-cap funds attracted ₹3,054 crore. Flexi-cap funds led the equity category, drawing ₹3,513 crore, up from ₹2,081 crore in July. Small-cap funds saw a slight dip, while value/contra and dividend yield funds posted moderate gains.

The study from Prabhudas Lilladher’s wealth management arm underlined the steady growth in equity mutual fund AUM and emphasised the varying performance levels across fund categories. While Large & Mid Cap and Focused Funds led the way with strong benchmark outperformance, Large Cap Funds struggled to keep pace. As the mutual fund landscape continues to evolve, the report serves as a valuable reference for investors seeking insights into the market's performance trends.

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