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NEW DELHI: Monthly net inflows into equity-oriented mutual fund (open and close-ended) schemes rose to 7,280 crore in December, rising threefold from November, as per data from Association of Mutual Funds in India (Amfi). Last month was the 22nd consecutive month of positive inflows into equity mutual funds (MFs).

Money collected through new fund offers (NFO), too, contributed to inflows into equity schemes. Mutual fund houses mopped up 1,996 crore through six equity NFOs launched in December.

Graphic: Mint
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Graphic: Mint

According to NS Venkatesh, chief executive, Amfi, the “Anticipation of a good budget, and the Indian growth story remaining intact," are the factors that will keep investors to continue participating in Indian equities."

Monthly SIP (systematic investment plan) contributions were also up for the fifth month in a row. SIP contributions rose 2% sequentially to 13,573 crore in December. Compared to December 2021, contributions rose 20%. The number of SIP accounts, too, went up by almost 25% year-on-year to 6.12 crore in December.

Among equity funds, small cap, mid cap, and large & mid cap funds saw net inflows worth 2,245 crore, 1,962 crore and 1,190 crore respectively. With small-cap stock valuations having corrected, investors continued to take advantage of the opportunity by investing in such funds.

On the other hand, debt MFs (open and close-ended) saw net outflows of 20,732 crore in December 2022, a reversal from the 6,943 crore net inflows logged in November. This was largely led by net outflow of 13,852 crore from liquid funds last month.

Venkatesh explained that this was due to companies withdrawing money from liquid funds to pay advance tax, and banks moving their treasury money from such funds to the Reserve Bank of India (under reverse repo) with the end of the quarter approaching. In fact, among open-ended debt MFs, all categories except ultra-short duration funds and long duration funds witnessed net outflows in December. That said, 12 new FMPs (fixed maturity plans) launched in December garnered net inflows of 1,532 crore. FMPs are defined-maturity debt schemes that invest in debt instruments maturing in line with the scheme tenure.

In total, mutual fund houses launched 36 new MF schemes, including equity, debt and hybrid, in December mobilising 8,486 crore.

ABOUT THE AUTHOR

Maulik Madhu

Maulik Madhu is a special correspondent at Mint. She started her career at the Competition Commission of India (CCI) and forayed into business journalism in 2012. Choosing to specialize in personal finance, she worked at FundsIndia and The Hindu Business Line, before joining Mint in March 2022.
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