Equity Mutual Fund Inflows Hit New Highs
Equity mutual funds saw a 21.69% increase in inflows month-on-month, reaching ₹41,887 crore, showcasing continued demand across all major categories:
- Large-cap funds recorded an inflow surge to ₹3,452 crore, nearly double from the previous month.
- Mid-cap funds saw a 50% increase, totaling ₹4,683 crore.
- Small-cap funds posted a 23% increase in inflows, attracting ₹3,772 crore.
- The industry’s total assets under management (AUM) edged up to ₹67.25 lakh crore in October, from ₹67.09 lakh crore in September.
Debt Funds Witness Significant Inflows
Debt funds made a strong comeback in October, recording an inflow of ₹1.57 lakh crore, reversing a substantial outflow of ₹1.14 lakh crore in September. Within the debt fund category:
- Liquid funds attracted an impressive ₹83,863 crore in inflows.
- Overnight funds received ₹25,784 crore, reinforcing investor interest in short-term debt options.
Hybrid and Passive Fund Categories Show Strong Growth
Hybrid schemes experienced substantial growth, with inflows of ₹16,863 crore in October, up from ₹4,901 crore in September. Arbitrage funds accounted for the highest inflows within the hybrid category, while multi-asset allocation funds were the top performers in the previous month.
Passive funds also saw a surge, with inflows reaching ₹23,428 crore in October, a significant increase from ₹3,254 crore the prior month. The Other ETFs segment led the category, drawing ₹13,441 crore in inflows.
SIP Contributions Reach Record Levels
Systematic Investment Plans (SIPs) continued their upward trajectory, with SIP contributions hitting an all-time high of ₹25,322.74 crore in October, up from ₹24,508.73 crore in September. SIPs now contribute approximately 20% to the industry’s total assets under management. In addition to record contributions, the SIP asset under management (AUM) also reached a new peak of ₹13,30,429.83 crore. The number of active SIP accounts increased to 10,12,34,212, underscoring the popularity of SIPs as a disciplined investment option.
Inflows in New Fund Offers (NFOs) Decline
Inflows into New Fund Offers (NFOs) dropped significantly, totaling ₹6,078 crore in October compared to ₹14,575 crore in September. The Index Funds category saw the most NFO launches.
Investor Sentiment and Market Outlook
The steady inflows in October reflect rising investor optimism. The monthly data reveals strong investor participation across categories, bolstered by SIPs, debt funds, and equity funds. This consistent inflow across asset classes highlights the Indian mutual fund industry’s growth momentum, as it continues to attract retail and institutional investors alike.
Tailwind Financial Services remains positive about the Indian market’s potential. We believe the Indian economy is poised for a strong growth, and despite short-term market fluctuations India’s equity market is expected to deliver good returns over the next few years. We advise investors to continue investing in equity mutual funds for strong wealth creation with a long horizon.
