Equity MFs see strong inflows in February despite dip in certain categories

  • Net inflows rose 23% month-on-month to 26,865.78 crore, the highest since March 2022, according to data from the Association of Mutual Funds in India on Friday

Mayur Bhalerao
First Published8 Mar 2024, 07:23 PM IST
Sectoral mutual funds are equity funds that allocate their investments to a particular sector of the economy.
Sectoral mutual funds are equity funds that allocate their investments to a particular sector of the economy.

Mumbai: Net inflows into equity mutual funds jumped to a 23-month high in February, led by a surge of investments in thematic or sectoral funds. Net inflows rose 23% month-on-month to 26,865.78 crore, the highest since March 2022, data released by the Association of Mutual Funds in India (Amfi) showed on Friday.

Thematic or sectoral fund inflows rose a whopping 134.4% month-on-month to 11,262.72 crore in February, from 4,804.69 crore in January. Some of these thematic funds included Groww Banking & Financial Services Fund, Quant PSU Fund, SBI Energy Opportunities Fund, WhiteOak Capital Banking & Financial Services Fund and WhiteOak Capital Pharma and Healthcare Fund.

“Equity inflows continue to soar, largely led by some NFOs (new fund offers). Notably, thematic/sectoral have seen massive interest. Small and midcap flows have been buoyant. Most categories have seen positive flows in equity,” said Anand Vardarajan, business head - institutional clients, banking, alternate investments and product strategy at Tata Asset Management.

“The equity inflows continue to surge, led by NFOs. The thematic space has received 16,000 crore net in January and February [combined] even as gross equity flows rose to 59,000 crore last month from approximately 51,000 crore in January," said Mayukh Datta, chief business officer, ITI Mutual Fund.

However, there was a notable decline in inflows across several fund categories on a month-on-month basis. Large-cap funds witnessed the steepest drop, with inflows falling by 28.4% to 921.14 crore in February. Mid-cap and small-cap funds also saw declines, with inflows dipping by 12.27% and 10.27% to 1,808.18 crore and 2,922.45 crore, respectively.

Debt funds followed the trend of declining inflows in February, experiencing a 16.5% drop on a month-on-month basis. This brought the inflows down to 63,808.8 crore. This decline comes after net outflows in both December ( 75,560 crore) and November ( 4,707 crore). However, liquid funds bucked the trend, experiencing a surge of 69% in inflows to 83,642.33 crore from 49,468 crore in January.

Systematic investment plans (SIPs) reached an all-time high of 19,186.58 crore in February, compared to 18,838.33 crore in January. The number of mutual fund folios registered in February also hit a record high of 174.19 million.

“These trends not only showcase that investors are evolving to being financially savvy but also highlight collaborative efforts shaping a landscape where smart investment practices are valued,” said Venkat Chalasani, chief executive, Amfi.

“With widespread participation from retail investors nationwide, it's clear that the mutual fund industry is on a path of steady growth and lasting significance,” he added.

The mutual fund industry's net assets under management (AUM) also saw a significant increase, reaching 54.54 trillion in February, up from 52.74 trillion in January.

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First Published:8 Mar 2024, 07:23 PM IST
HomeMutual FundsEquity MFs see strong inflows in February despite dip in certain categories

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