Equity mutual funds see record Rs 41,887 crore inflow in October, monthly SIPs cross Rs 25,000 crore: AMFI

Equity mutual funds witnessed a record inflow of Rs 41,887 crore in October, marking a surge of over 21 per cent on a month-on-month (MoM) basis, fuelled by robust investments in thematic funds. 

This also marks the 44th consecutive month of net inflow in the equity-oriented funds, highlighting the ever-increasing appeal of mutual funds among investors, data with the Association of Mutual Funds in India (AMFI) showed on November 11. 

October’s numbers are indeed phenomenal, especially given the backdrop of a steep market correction. While earlier this year, equity inflows were buoyed by strong market performance, October marked a stark reversal. 

The monthly mutual fund SIP crossed the Rs 25,000 crore mark for the first time in October and stood at Rs 25,323 crore against Rs 24,509 crore in September. The monthly SIP contribution was recorded at Rs 16,928 crore in the same period a year ago. 

“The 5-6 percent drop in both the Sensex and Nifty was one of the sharpest in recent years, similar to what we last saw in March 2020. Despite this, retail investors have shown remarkable resilience, with inflows exceeding Rs 40,000 crore,” Santosh Joseph, Co-founder and CEO of Germinate Investor Services, told PTI. 

Overall, the mutual fund industry witnessed an inflow Rs 2.4 lakh crore in the month under review, after an outflow of Rs 71,114 crore in September. The huge inflow was due to investments to the tune of Rs 1.57 lakh crore into debt schemes. 

The industry’s net assets under management rose to Rs 67.25 lakh crore last month from Rs 67 lakh crore in September. As per the data, equity-oriented schemes witnessed an inflow of Rs 41,887 crore in October, as compared to Rs 34,419 crore in September. Before this, equity schemes saw an inflow of Rs 40,608 crore in June. 

Within the equity schemes, sectoral thematic attracted investors with the highest net inflows of Rs 12,279 crore during the month under review. However, flow in the segment was less compared to Rs 13,255 crore in September. 

The fixed-income category saw a major overhaul as well. Liquid mutual funds received a record figure of Rs 83,863.3 crore in inflows after making a significant outflow of Rs 72,666 crore in September. Credit risk mutual funds saw outflows decline to Rs 357.8 crore, from Rs 484 crore in the prior month. 

Corporate bond mutual funds saw steady inflow at Rs 4,644.4 crore compared with Rs 5,039 crore in the previous month. At Rs 532.8 crore, dividend yield mutual funds recorded a sharp decline in flows against Rs 1,530 crore drawn in the previous month. 

In the tax-saving segment, at Rs 362 crore, Equity Linked Savings Schemes (ELSS) saw net inflows against an outflow of Rs 349 crore in the previous month. 

Speaking to Business Today, Feroze Azeez, Deputy CEO, Anand Rathi Wealth Limited, said, “Amid market volatility, AMFI data shows a trend which is favouring diversified equity funds which are mostly large cap and mid cap oriented. The SIP contributions have consistently reached new peaks over the past year, marking a 48% YoY growth and reflecting positive market sentiment.” 

In the debt-oriented schemes, short-term investment funds have received significant inflows, indicating a cautious approach. Investors might have parked funds in liquid, overnight, money market funds waiting for the right time to enter the market, he added. 

According to Feroze, the market sentiment is positive even amid the volatility and investors have faith in the market. "We expect 11-12 percent growth in large caps and around 20% growth in mid and small cap segment. A balanced approach with 55 percent in large caps and rest in mid and small cap space can help in portfolio diversification," he said.