Equity mutual fund inflows jump to nearly two-year high in Jan: Amfi

Inflows into India's equity mutual funds rose to a nearly two-year high in January, led by sustained interest in small-caps, data from the Association of Mutual Funds in India (AMFI) showed on Thursday.

Net equity mutual fund inflows rose 28 sequentially to Rs 21,781 crore ($2.62 billion), the highest since March 2022.

"Strong macroeconomic growth outlook, stable earnings have sustained investor interest in equity mutual funds across all segments," said Venkat Chalasani, chief executive of AMFI.

Small-cap funds recorded the highest investments among equity-oriented schemes for the 16th straight month at Rs 3,257 crore.

Inflows into mid-caps rose 48 month-on-month to Rs 2,061 crore, while large-caps inflows hit a 19-month high in January.

"It is advisable for investors to increase their allocations to large-caps, but money will continue to move to small- and mid-caps ahead of elections on expectations of strong near-term returns," said Aishvarya Dadheech, founder and chief executive of Fident Asset Management.

So far in 2024, small- and mid-caps have jumped 9.5 and 14.8 , respectively, outperforming the benchmark Nifty 50's 0.3 rise.

Specifically, there will be buying in sectors that benefit from policy continuity over the next few months, Dadheech added.

This is the 35th consecutive month of equity inflows on a net basis.

The sustained domestic inflows limited losses in India's benchmarks, which witnessed selling by foreign portfolio investors in January, mainly in financials after the lacklustre results of HDFC Bank.

The Nifty 50 was down 0.03 in January while the Sensex shed 0.68 .

Contributions into systematic investment plans (SIPs) - in which investors make regular payments into mutual funds - hit a new record of Rs 18,830 crore last month, with the number of SIP accounts also climbing to a new high of 79.20 million.