Mutual Fund News: Strong macroeconomic fundamentals support the nearly 588% annual growth in inflows into open-ended equity mutual funds.
The mutual fund sector in India has maintained its growth trajectory, with net inflows increasing by 93% to Rs 25,616 crore in November 2023 from Rs 13,264 crore in the same month the previous year. Although there were net withdrawals from debt mutual funds, net inflows into open-ended equity mutual funds increased by a strong 588 percent year over year.
From November 30, 2022 to November 30, 2023, the net Assets under Management (AUM) of the mutual fund industry in India increased by 21%, reaching Rs 49.05 lakh crore from Rs 40.38 lakh crore. In November 2023, the industry's Average Assets under Management (AAUM) increased to Rs 48.75 lakh crore from Rs 40.49 lakh crore in October 2022. Net AUM climbed by approximately 5% sequentially from Rs 46.72 lakh crore in October of this year.
Net inflows into equity-oriented schemes increased from Rs 2258 crore during the same period last year to nearly Rs 15,536 crore in November, a 588 percent increase. ICRA Analytics, a fully owned subsidiary of ICRA Ltd. that conducts analysis, stated that although all equity fund categories saw strong net inflows, mid- and small-capitalization and theme funds stood out as particular performers.
Within the growth/equity-oriented schemes, net inflows of Rs. 1965 crore were recorded by sectoral/thematic funds, Rs. 1713 crore by multi-cap funds, and Rs. 3699 crore by small-cap funds and Rs. 2666 crore by mid-cap funds. Exchange-traded funds that track gold saw net inflows of Rs 333 crore in November of this year compared to net outflows of Rs 195 crore during the same month previous year.
In November of this year, there were net outflows of Rs 4707 crore from open-ended debt mutual funds, compared to net inflows of Rs 3669 crore during the same period last year. Eleven out of sixteen fund categories experienced outflows in November.
Commenting on the latest AMFI data, Ashwini Kumar, Head Market Data, ICRA Analytics said, “The Indian equity markets have been on a steady rise over the past week on the back of positive sentiments on the expectations of political stability in the upcoming General Elections of 2024 and a strong domestic economic outlook. The fall in global crude oil prices and the decline in US treasury yields further aided the gains. The Assets under Management (AUM) of Indian mutual fund industry grew by 21 per cent YoY to touch Rs 49.05 lakh crore in November 2023. The equity-oriented schemes are expected to register a good growth in the second half of this fiscal supported by India’s strong macroeconomic fundamentals. Bond yields decreased marginally following the decline in US treasury yields. The rate-pause stance adopted by Reserve Bank of India at the recently concluded Monetary Policy Committee meeting may lead to some value buying while the yield may trade sidelines.”