Equity mutual fund inflows hit 22-month high in January, shows data

Strong start to new calendar year with gross inflows topping Rs 50K crore; Industry AUM nears Rs 53 trillion

Equity mutual fund (MF) schemes have garnered the highest-ever gross inflows at Rs 50,800 crore in January, despite a spike in volatility. 

The inflows were boosted by a 7 per cent month-on-month (M-o-M) jump in the gross inflows through the systematic investment plan (SIP) route to hit a new high of Rs 18,800 crore.

The record high gross inflows and a moderation in outflows led to a 28 per cent M-o-M rise in the net inflows at Rs 21,780 crore — the highest since March 2022.

“Despite slight volatility in January, the markets closed flat. Equity schemes experienced a surge in inflows with the sectoral and smallcap schemes being the primary contributors," said Akhil Chaturvedi, the chief business officer of Motilal Oswal AMC.

The gross inflows into equity schemes had first crossed the Rs 50,000-crore mark in December 2023.

January also marked the resumption of higher inflows into largecap schemes after almost Rs 3,000 crore outflow during the calendar 2023, when the monthly flows were mostly low or negative.

Largecap schemes garnered net inflows of Rs 1,290 crore in January. Flexicap funds saw a jump in flows to Rs 2,450 crore.

The BSE Sensex and the Nifty ended flat in January after hitting fresh record highs during the first half of the previous month. The Nifty posted gains of over 0.75 per cent during nine of the 21 sessions last month.

“We saw a few days of sharp market correction where investors seem to have made additional purchases besides the SIPs. SIP plus lump sum is the mantra to take advantage of market volatility," said Manish Mehta, National Head - Sales, Marketing & Digital Business, Kotak Mahindra AMC.

The flows were strong across fund categories, with the net inflows into hybrid schemes surging 37 per cent M-o-M to Rs 20,600 crore, according to data from the Association of Mutual Funds in India (Amfi).

Debt funds and passive schemes garnered another Rs 80,000 crore, leading to a nearly 4 per cent jump in the total assets under management (AUM) of the industry to Rs 52.7 trillion.

“It is clear that we are in an era of growth and participation through financial savings instruments. Moreover, the industry's net AUM soaring to Rs 52.74 crore further accentuates the resilience and potential of mutual funds as a preferred investment avenue,” said Venkat Chalasani, chief executive of Amfi.

The AUM also got a boost from new fund offerings. A total of 17 schemes were launched in January and they garnered Rs 6,800 crore.

Multi-asset funds cornered the bulk of the new fund offering (NFO) collections. There were three launches in the category and they together collected Rs 4,250 crore.

The association also pointed out that new SIP registrations touched a new milestone with 5.2 million account openings. The number of active SIP accounts surged to 79.2 million.

SIP AUM swelled to Rs 10.3 trillion from Rs 9.96 trillion in December 2023. The folio count also reached a new high of 170 million.