Equity Mutual Fund Inflows Surge To Rs 40,608 Cr In June
Mutual fund industry assets under management (AUM) surpasses Rs 60 lakh crore for the first time; debt funds see significant outflows amid tax and financial adjustments
Inflows into equity mutual funds surged by 17 per cent to Rs 40,608.19 crore in June, setting a fresh high, according to data released by the Association of Mutual Funds of India (AMFI) on 9 July.
The previous month saw a record net inflow into equity mutual funds of Rs 34,697 crore, marking an 83.42 per cent increase. The mutual fund industry's assets under management (AUM) rose to Rs 61.16 lakh crore in June, surpassing the Rs 60 lakh crore mark for the first time.
"We have observed consistent positive inflows in equity schemes since April 2021. I believe India is one of the fastest-growing economies in the world. There will be a huge wealth creation opportunity in the coming 5-7 years. Mutual funds remain a preferred, transparent, and cost-effective investment product in India. The trend is positive for the industry's future growth, and there are chances we will cross Rs 100 lakh crores AUM by 2030," said Hitesh Thakkar, Acting CEO of ITI Mutual Fund.
However, debt mutual funds experienced net outflows of Rs 1,07,357.62 crore during the month, with overall open-ended mutual funds witnessing net outflows of Rs 43,108.80 crore. Despite this, open-ended equity funds maintained positive inflows for the 40th consecutive month.
Investment through systematic investment plans (SIPs) increased to Rs 21,262 crore in June from Rs 20,904 crore in May. April 2024 was the first month that SIP investments exceeded Rs 20,000 crore.
“SIP flows, NFO collections, and lump sum purchases during market corrections led to record flows into equity funds in June. Growing confidence, repeat investments, and word-of-mouth are driving this trend,” said Manish Mehta, National Head of Sales, Marketing & Digital Business at Kotak Mahindra Mutual Fund.
Sectoral/Thematic Funds attracted the most equity fund inflows, with net investments of Rs 22,351.69 crore in June. New fund offers (NFOs) were a major contributor, with nine new funds raising Rs 12,974 crore during the month.
In the equity fund category, inflows into multi-cap funds surged 78 per cent to Rs 4,708.57 crore, and large-cap fund investments increased 46 per cent to Rs 970.49 crore. Conversely, smallcap fund inflows dipped 17 per cent to Rs 2,263.47 crore, and midcap fund investments decreased 3 per cent to Rs 2,527.84 crore.
June was volatile for equities, with general election results causing significant market fluctuations. On June 4, benchmark indices NSE Nifty and BSE Sensex dropped nearly 6 per cent each after it was revealed that the BJP did not secure an outright majority in the Lok Sabha elections. However, the indices rebounded as the BJP-led National Democratic Alliance formed the government for the third consecutive term, resulting in a 7 per cent gain for both Nifty and Sensex by the end of June.
"June 2024 saw the Sensex increase by 6.9 per cent, Nifty by 6.6 per cent, the Mid-cap index by 7.8 per cent, and the small-cap index by 9.7 per cent. FPIs invested over USD 3.2 billion in stocks, resulting in a record-high infusion of Rs 40,608 crores into equity plans. For the second consecutive month, the net AUM of midcap and sectoral funds has surpassed that of large-cap mutual funds due to declining market share and poor inflows in the large-cap space," said Viraj Gandhi, CEO of Samco MF.
In the debt fund category, Liquid Funds saw net outflows of Rs 80,354.03 crore, and the Overnight Fund category experienced net outflows of Rs 25,142.72 crore. Experts attribute the outflows in the debt category to advance tax payments and other quarter-end accounting and financial requirements in June.
