Small, mid-cap funds boost overall flows into equity MFs in December

Inflows into India's equity mutual funds rose about 15 per cent month-on-month in December, with investors continuing their buying spree unaffected by the prospect of fewer US rate cuts in 2025 and worries of likely moderation in earnings.

Inflows into equity mutual funds rose to Rs 41,156 crore ($4.8 billion) last month compared to Rs 35,943 crore in November 2024.

December saw the second highest monthly inflows ever, extending the streak of inflows to the 46th month - the longest streak on record, data released by the Association of Mutual Funds in India (AMFI) on Thursday showed.

India's benchmark NSE Nifty 50 and BSE Sensex fell about 2 per cent in December 2024, while the broader smallcaps and midcaps rose 0.6 per cent and 1.4 per cent, respectively.

Money coming into smallcap and midcap equity mutual funds rose 4.3 per cent and 13.5 per cent respectively, while inflows into largecap funds fell 21 per cent.

This is the highest and the second-highest monthly inflows on record into midcap and smallcap equity mutual funds, respectively.

"Higher returns in the broader small- and mid-caps have continued to aid investor interest in these segments. But earnings delivery in the December quarter will be crucial for the interest to sustain," said Sanjeev Hota, vice president and head of research at Mirae Asset Sharekhan.

Inflows into sectoral and thematic funds doubled month-on-month to Rs 15,332 crore in December 2024, helped by the launch of 12 new such funds during the month. These funds saw greater interest compared with other categories of equity mutual funds for the 12th straight month.

Contributions to systematic investment plans, where investors make regular payments into mutual funds, rose to Rs 26,459 crore, hitting a record high for the 17th time in 18 months.