Large-Caps Find Favour With Investors Even As Overall AUM Dips 2%, Reveals Amfi Monthly Data

In March 2024, the mutual Fund industry saw shifts in fund flows, with investors favouring large-cap funds over small-cap funds. According to the monthly data released by the Association of Mutual Funds in India (Amfi) on April 10, 2024, total inflows into open-ended equity mutual funds dipped 16 per cent, amounting to Rs 22,633 crore for the month. Overall, the total assets under management (AUM) of mutual funds dipped by 2 per cent, reaching Rs 53.12 lakh crore, down from Rs 54.24 lakh crore in February 2024.

Also Read: Sensex Breaches 75,000 In A First; Experts Suggest Bright Future, But Stress On Portfolio Rebalancing

Large-Cap Funds Lead The Chart

Despite the dip in equity inflows, large-cap funds were a notable exception, as inflows in this category surged by 131 per cent, reaching around Rs 2,128 crore during the month.

Much of this shift came from fund withdrawals from small-cap space. Among equity funds, sectoral or thematic funds holding the largest number of funds, continues to be the category with highest inflows at Rs 7,917 crore, followed by large-cap and mid-cap funds at Rs 3,215 crore.

Shift From Small-Caps

In March, small-cap funds experienced an outflow of Rs 94.17 crore, while investments in mid-cap funds dipped by over 40 per cent to Rs 1,018 crore compared to February’s inflow of Rs 1,808 crore.

This decline follows the Securities and Exchange Board of India’s (Sebi’s) directive for mutual funds to conduct stress tests to safeguard investor interest as it flagged “froth” building up in the small- and mid-cap space. In continuation of the February trend, the inflows into hybrid fund categories saw a decline in March, amounting to Rs 5,583.62 crore, in contrast to February’s inflow of RS 18,105 crore.

Debt Funds Lead Outflow

The mutual fund industry recorded an outflow of Rs 1.59 lakh crore, led by debt-oriented schemes.

All the debt categories were negative, except for long-duration funds. Among the debt-oriented funds, liquid funds saw the highest outflow Rs 1.57 lakh core followed by money market funds at Rs 8,719.75 crore.