Total mutual fund industry assets stood at an average  ₹28 lakh crore
Total mutual fund industry assets stood at an average 28 lakh crore

Inflows to equity mutual funds jump to 5-month high as midcaps, smallcaps revive

  • Monthly contributions through SIPs into equity funds remained little changed at 8,500 crore
  • The rally has since spread to the broader market

Inflows into Indian equity funds climbed to a five-month high amid signs of revival in the nation’s small- and mid-cap stocks, a battered corner of the $2.2 trillion market for two straight years.

Equity mutual funds took in 7,880 crore last month, according to the Association of Mutual Funds in India. That’s the highest since August.

A gauge of mid-cap stocks has turned a corner this year after back-to-back annual declines sparked by investor preference for larger companies amid a slowing economy. India’s main stock indexes hit record highs in early January led by a handful of stocks, similar to 2019. The rally has since spread to the broader market even as the S&P BSE Sensex logged its first loss since August last month.

Inflows into equity mutual fund climb to highest since August
Inflows into equity mutual fund climb to highest since August

“We are seeing initial signs of investor sentiment turning positive for the broader market, which wasn’t the case last year," said Arun Kumar, head of research at FundsIndia.com. “If the market holds up for another 3-6 months, we expect to see strong inflows in this segment."

Contributions from regular savers into equity funds remained little changed at 8,500 crore, AMFI’s data showed. Total industry assets stood at an average 28 lakh crore.

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