Mutual Funds: The latest data by the Association of Mutual Funds of India (AMFI) showed that open-ended equity mutual fund inflows dropped by almost 9% and touched Rs 37,113.39 crore in July. The drop was due to fall in investments in investments in large-cap and mid-cap funds.
Net assets under management (AUM) of the mutual fund industry rose to hit Rs 64,96,653.14 lakh crore in July, data showed. In June, inflows into equity mutual funds touched Rs 40,608.19 crore in June, which was a fresh high. The net inflow into equity mutual funds had surged by 83.42% to Rs 34,697 crore in May.
In July, inflows into open-ended equity funds have remained in the positive zone for the 41th month straight in a row. Continuous investments in sectoral or thematic funds fuelled inflows into equity mutual funds. In July, the category saw net inflows of Rs 18,386.35 crore.
In July, small-cap funds experienced an increase in inflows, totaling Rs 2,109.20 crore, down from Rs 2,263.5 crore in the previous month. Mid-cap schemes attracted investments amounting to Rs 1,644.22 crore in July, a decrease from Rs 2,527.84 crore in June. Large-cap funds received inflows of Rs 670.12 crore in July, down from Rs 970.4 crore in JUne.
Multi-cap funds witnessed an inflow of Rs 7,084.61 crore in July, compared to Rs 4,708.57 crore in the previous month. Liquid funds recorded a substantial inflow of Rs 70,060.88 crore in July, contrasting the outflow of around Rs 80,354.03 crore in June. SIP contributions reaching an all-time high of Rs 23,331.75 crores in July 2024.
Sectoral and thematic funds experienced inflows amounting to Rs 18,386.3 crore, showcasing a decrease compared to the previous month's inflow of Rs 22,352 crore. Correspondingly, the total assets under management (AUM) saw an increase to Rs 64.9 lakh crore from the Rs 61.16 lakh crore recorded in June.
"The mutual fund industry has demonstrated positive growth with retail investors consistently embracing mutual funds as a reliable investment avenue. It’s evident that mutual funds have become an integral part of retail investors' financial strategies. SIP contributions reaching an all-time high of Rs 23,331.75 crores in July 2024 reflects the growing financial discipline among retail investors, helping them build wealth systematically over time. As we continue to navigate an ever-evolving market landscape, the industry's focus remains on empowering investors and fostering long-term financial well-being," said Venkat Chalasani, Chief Executive, AMFI.
In the fixed-income category, debt mutual funds experienced significant net inflows totaling Rs 1,19,587.60 crore in the observed month. Conversely, in June 2024, debt funds reported net outflows amounting to Rs 1,07,357.62 crore.
Exchange-traded funds (ETFs) recorded inflows of Rs 5,787.3 crore, down from Rs 9,134 crore in June. Credit risk funds experienced outflows of Rs 542.8 crore, compared to Rs 478 crore the previous month. Equity-linked savings schemes (ELSS) saw outflows of Rs 637.6 crore, up from Rs 445 crore in June.
Some highlights:
> Mutual Fund Folios are at an all-time high at 19,84,06,294 in July 2024 > Retail MF Folios (Equity + Hybrid + Solution Oriented Schemes) also at an all-time high at 15,89,35,085 for July 2024 as compared to 15,32,56,488 for June 2024. > Retail AUM (Equity + Hybrid + Solution Oriented Schemes) stood at Rs 38,35,384 crores for July 2024 with an Average AUM of ₹ 37,77,652 crores. > 41st month of positive equity inflows, starting from March 2021. > Growth/Equity Oriented schemes inflows for the month of July is Rs 37,113.39 crores > Number of new SIPs registered in July 2024 stood at 72,61,928 > The SIP AUM is highest ever at Rs 13,09,385.46 crores for the month of July 2024 compared to Rs 12,43,791.71 crores for the month of June 2024 > SIP contribution stood at an all-time high of Rs 23,331.75 crores in July 2024 as against Rs 21,262.22 crores in June 2024. > The number of SIP accounts stood at highest ever at 9,33,96,174 in July 2024 as compared to 8,98,66,962 in June 2024 > A total of 15 schemes were launched in the month of July 2024, all in the category of open-ended scheme, raising a total of Rs 16,565 crores. > AMFI has recommended to the authorities advocating for the continuation of grandfathering for investments in the respective categories of funds as done in the past. AMFI continues to remain hopeful for a positive outcome.
"June 2024 saw the highest equity MF inflows in the last 12 months at Rs 40,608.19 crore, with July 2024 following at Rs 37,113 crore. This was partially fuelled by the shift from PMS to MFs due to a change in taxation. Multicap funds have consistently attracted more inflows over the past three months, reaching Rs 7,080 crore in July 24. Midcap funds, however, saw slower inflows this month, while small caps brought in nearly the same amount as in June 2024, around Rs 2,000 crore. Surprisingly, large-cap funds haven't seen higher inflows compared to June 2024, but dividend yield funds, which are large-cap oriented, recorded comparatively higher inflows at Rs 630 crore against Rs 520 Cr last month. Thematic/sectoral funds, which brought in almost Rs 22,000 crore in June 2024, saw a slower pace in July 2024 with inflows of around Rs 18,000 crore, suggesting that the previous surge was likely driven by speculation," said Feroze Azeez, Deputy CEO, Anand Rathi Wealth Limited.
“The inflow data shows an underlying change in the mood of investors. They are shifting their focus from core side of the portfolio to the tactical or satellite side of the portfolio. This is evident from the fact that in the last two years, we saw small caps getting heavy inflows, which now is tapering as investors are now shifting to sectoral funds. It will be interesting to see if this is a shift in risk profile to it is just blatant near term return chasing,” said Swarup Mohanty, Vice Chairman & CEO at Mirae Asset Investment Managers (India).
"We feel retail investors are now understanding that volatility is part of long-term wealth creation journey. The share of financial assets has been increasing rapidly and within financial assets, mutual fund market share is relatively high. Mutual fund plays a key role in enabling wealth creation for individual investors and providing tools for long term financial planning. I am sure that mutual fund industry will surpass the milestone trillion AUM and 100 million Investors in next 3 to 4 years’ time,” said Hitesh Thakkar, Acting CEO, ITI Mutual Fund.