The inflows into equity mutual funds rose in January, led by investments in small- and multi-cap funds. SIP contribution jumped from Rs 13,573.08 crore in December 2022 to Rs 13,856.18 crore in January 2023. Net investments in equity and equity-linked schemes surged over 70% from December to Rs 12,546.5 crore in January, according to data released by the Association of Mutual Funds in India (AMFI).
In January SIP accounts hit 6.21 crore, compared to 6.12 crore in December. “SIPs have shown a very positive trend, and contribution has touched an all-time high. Considering the way the market is behaving, retail investors have continued to look at equity as an investable segment, which is why inflows are on an upward trend,” AMFI Chief Executive Officer N S Venkatesh said in a media call.
The hybrid fund inflow rose to Rs 4,492 crore on-month. The liquid fund outflow stood at Rs 5,041.7 crore, while the ETF outflow came in at Rs 1,709 crore. The credit risk outflow was recorded at Rs 449.3 crore. The total Assets Under Management (AUM) came in at Rs 39.62 lakh crore. The total debt scheme outflow was reported at Rs 10,316.1 crore in January. The large-cap fund inflow stood at Rs 716 crore.
“The Mutual Fund industry grew by 1% on a monthly basis in Average Assets Under Management (AAUM) to 40.8 lakh crore in January 2023. The Mutual Fund industry has grown by four times in less than a decade (the industry was 10 lakh crore in May 2014). The financialisation of savings is real and largely driven by AMFI and industry-led initiatives. This has also been supported by low-interest rates in fixed deposits and broadly speaking, lacklustre returns in residential real estate,” said Gautam Kalia, SVP and Head Super Investor at Sharekhan by BNP Paribas.
Market analysts’ concerns over the reallocation of retail clients from Mutual funds to fixed assets is been keenly watched. “As interest rates rise, gold prices continue higher and the equity market returns stagnate, there is a real concern that retail clients will lose patience and reallocate resources back to fixed deposits, real estate and gold. It will be interesting to see whether retail clients continue to stay invested and truly buy the long-term wealth-creation promise of Mutual Funds,” Gautam Kalia added.