The Indian mutual fund industry saw net outflows of Rs. 1,839 crores in Q4 2022-23, with equities and sectoral and thematic funds leading the inflows, a Morning Star report shows.
The Indian market is resilient despite the lackluster performance of domestic mutual funds, except for sectoral and thematic plans that saw the highest inflows in the fourth quarter of FY2022-23, a study by financial services company Morning Star said on Wednesday.
The net outflows of open-end mutual funds were Rs. 1,839 crores in the last three months of the fiscal year. The report said the industry saw some tough times in the first nine months of 2022.
The net outflows in the quarter were mainly from the fixed-income and allocation asset classes. However, the study saw healthy growth in net equity inflows year-on-year.
In the fourth quarter, sectoral and thematic funds saw the highest inflows, followed by small-cap and mid-cap funds. Weight-wise, the large-cap and flexi-cap categories continue to lead the inflows into mutual funds, followed by mid-cap funds.
Performance of Open-End funds
The asset under management (AUM) of open-ended funds stood at around Rs. 39.07 lakh crores as of March 2023, down one per cent compared to the previous quarter. But the AUM has increased by 6 per cent compared to last year.
The net outflows of open-end mutual funds stood at Rs. 1,839 crores in the fourth quarter after witnessing net inflows in the first three quarters of the fiscal year 2022-2023.
In addition, the last quarter saw 90 new fund offerings, raising Rs. 20,173 crores during their NFO period. Also, 182 open-end funds & ETFs and 71 closed-end funds were launched in FY2022-2023, collecting Rs. 62,342 crores.
Category-Wise Distribution
The report highlights that the open-end mutual fund industry is well diversified, with equity funds comprising around 39 per cent of the industry AUM, followed by fixed-income funds with 30 per cent. In addition, the allocation/hybrid, solution, and other categories have approximately 12 per cent, one per cent, and 18 per cent weightage, respectively.
Performance Of Equity Funds
The fourth quarter of the fiscal year 2022-23 saw a net inflow of Rs. 48,766 crores in open-end equity funds, with their total assets under management standing at Rs. 15,17,082 crores as of March 2023, down one per cent since December 2022 but an increase of 11 per cent over the same period last year.
Performance Of Other Categories
On the other hand, open-end fixed-income funds saw net outflows of Rs. 81,016 crores in the fourth quarter, much higher than the previous quarter, wherein it saw net outflows of Rs. 21,096 crores. The asset class witnessed net outflows in all the quarters of the fiscal year 2022-2023. Its assets under management dipped 5 per cent since the last quarter and 9 per cent since the same period the previous year.
The 'Other Schemes' category, which includes subcategories of ETFs (other and gold), index funds, and funds of funds overseas, continues to gain much traction. Among the funds launched in the fourth quarter of the fiscal year 2022-2023, SBI Dividend Yield Fund managed to garner the highest flows during NFO.