Amid a surge in equity markets in recent months and the benchmark indices scaling new peaks, domestic mutual fund investors seem to be in no rush to book profits. Rather, data from the Association of Mutual Funds of India showed that inflows into equity mutual funds more than doubled in June to Rs 8,637.49 crore, compared with Rs 3,240.30 crore in May.
This surge in inflows into equity funds is being driven by retail investments via systematic investment plans (SIPs). Last month, the number of SIP accounts stood at 6,65,37,033, the highest ever. The new SIP registrations were also the highest ever in June at 27,78,507.
The monthly SIP contributions have now touched Rs 14,734.45 crore, and the total SIP AUM was at Rs 7,93,608.79 crore in June.
The overall retail mutual fund folios across equity, hybrid and solution-oriented schemes were also at an all-time high of 11,90,63,434 in June, while the total retail AUM across these schemes touched Rs 23,09,169 crore.
"The impressive increase of 29 per cent in retail AUM on an annualised basis and 25 per cent in average assets under management indicates a positive trend of net retail inflows. As we look ahead, the record-breaking number of SIP registrations reflects a strong belief in India's growth story," opined N.S. Venkatesh, CEO of AMFI.
It is interesting to note that inflows into small-cap funds were at a record at Rs 5,471.75 crore in June, even as the large-cap funds saw outflows of Rs 2,049.61 crore. Value-oriented and contra funds were also in demand last month; the category saw inflows of Rs 2,239.08 crore. Mid-cap funds and large and mid-cap funds also had good inflows at Rs 1,748.51 crore and Rs 1,146.69 crore respectively.
"Investors have been consistently investing in both these (small-cap and mid-cap) categories since a couple of years. The last time these categories witnessed net outflows was in February 2021 for mid-cap and September 2021 for small-cap," noted Melvyn Santarita, analyst - manager research at Morningstar India.
Investors also continued to pour money into arbitrage funds and multi-asset allocation funds. However, there were some outflows from balanced advantage funds and aggressive hybrid funds in June, the AMFI data showed.
Foreign institutional investors too have been aggressively buying Indian equity since March. Foreign portfolio investors have so far invested Rs 99,222 crore in the equity market in the calendar year 2023 as of July 10, according to data from NSDL.
The strong flows into equity mutual funds and the resurgence of FII investments have driven India's stock market indices to record highs. The BSE Sensex hit a life high of 65,898.98 points in intra-day trading on Friday. On Monday, the Sensex rose 63.72 points or 0.10 per cent to end at 65,344.17 level. The BSE mid-cap and small-cap too hit a record high on Friday.
While inflows into equity funds were strong in June, debt funds saw outflows of Rs 14,135.52 crore, as investors pulled out Rs 28,545.45 crore from liquid funds.
"This was expected, with June being quarter end, when corporates make advance tax payments. Hence, majority of outflows happened from the liquid and ultra-short duration categories," said Santarita of Morningstar India.
The net assets under management of the mutual fund industry stood at more than Rs 44.39 lakh crore as of June 30, 2023, compared with Rs 43.20 lakh crore on May 31, 2023 and Rs 35.64 lakh crore on June 30, 2022.
This surge in inflows into equity funds is being driven by retail investments via systematic investment plans (SIPs). Last month, the number of SIP accounts stood at 6,65,37,033, the highest ever. The new SIP registrations were also the highest ever in June at 27,78,507.
The monthly SIP contributions have now touched Rs 14,734.45 crore, and the total SIP AUM was at Rs 7,93,608.79 crore in June.
The overall retail mutual fund folios across equity, hybrid and solution-oriented schemes were also at an all-time high of 11,90,63,434 in June, while the total retail AUM across these schemes touched Rs 23,09,169 crore.
"The impressive increase of 29 per cent in retail AUM on an annualised basis and 25 per cent in average assets under management indicates a positive trend of net retail inflows. As we look ahead, the record-breaking number of SIP registrations reflects a strong belief in India's growth story," opined N.S. Venkatesh, CEO of AMFI.
It is interesting to note that inflows into small-cap funds were at a record at Rs 5,471.75 crore in June, even as the large-cap funds saw outflows of Rs 2,049.61 crore. Value-oriented and contra funds were also in demand last month; the category saw inflows of Rs 2,239.08 crore. Mid-cap funds and large and mid-cap funds also had good inflows at Rs 1,748.51 crore and Rs 1,146.69 crore respectively.
"Investors have been consistently investing in both these (small-cap and mid-cap) categories since a couple of years. The last time these categories witnessed net outflows was in February 2021 for mid-cap and September 2021 for small-cap," noted Melvyn Santarita, analyst - manager research at Morningstar India.
Investors also continued to pour money into arbitrage funds and multi-asset allocation funds. However, there were some outflows from balanced advantage funds and aggressive hybrid funds in June, the AMFI data showed.
Foreign institutional investors too have been aggressively buying Indian equity since March. Foreign portfolio investors have so far invested Rs 99,222 crore in the equity market in the calendar year 2023 as of July 10, according to data from NSDL.
The strong flows into equity mutual funds and the resurgence of FII investments have driven India's stock market indices to record highs. The BSE Sensex hit a life high of 65,898.98 points in intra-day trading on Friday. On Monday, the Sensex rose 63.72 points or 0.10 per cent to end at 65,344.17 level. The BSE mid-cap and small-cap too hit a record high on Friday.
While inflows into equity funds were strong in June, debt funds saw outflows of Rs 14,135.52 crore, as investors pulled out Rs 28,545.45 crore from liquid funds.
"This was expected, with June being quarter end, when corporates make advance tax payments. Hence, majority of outflows happened from the liquid and ultra-short duration categories," said Santarita of Morningstar India.
The net assets under management of the mutual fund industry stood at more than Rs 44.39 lakh crore as of June 30, 2023, compared with Rs 43.20 lakh crore on May 31, 2023 and Rs 35.64 lakh crore on June 30, 2022.
Disclaimer: Comments posted here are the sole responsibility of the user and do not reflect the views of THE WEEK. Obscene or offensive remarks against any person, religion, community or nation are punishable under IT rules and may invite legal action.
