Record inflows, equity rally drive MF AUM past Rs 60 trillion: Amfi data

Industry adds latest Rs 10 trillion in just six months

Net inflows into equity mutual funds (MFs) surged 17 per cent sequentially to a record high of Rs 40,608 crore in June, supported by a Rs 14,370-crore mop up by 11 new equity fund offerings (NFOs) during the month.

Gross inflows from the systematic investment plan (SIP) route, which rose to a new high of Rs 21,262 crore, also boosted net inflows, shows data from the Association of Mutual Funds in India (Amfi).

According to MF executives, the inflows were also boosted by lump sum investments on June 4 as the equity market saw a sharp decline.

“SIP flows, NFO collections and lump sum purchases on days when markets witnessed correction led to record flows in equity,” said Manish Mehta, national head — sales, marketing & digital business — Kotak Mahindra AMC.

“As confidence grows, repeat investments and word of mouth are leading to this movement in flows and industry growth,” he added.

“The record inflows in equity funds for June were driven by steady SIP flows, robust NFO collections, and lump sum purchases during corrections. Investors shrugged off election results-related volatility and as the uncertainty over government formation cleared, they used the correction to add to their exposures,” said Akhil Chaturvedi, executive director & chief business officer, Motilal Oswal AMC.

The strong inflows coupled with mark-to-market gains propelled assets under management (AUM) of the MF industry past the Rs 60-trillion-mark for the first time.

At the end of June, the AUM stood at Rs 61.3 trillion, up 3.8 per cent month-on-month (M-o-M) despite the Rs 1-trillion outflow from debt funds.

Key benchmark indices — Nifty50 and Sensex — gained over 6.5 per cent last month despite correcting nearly 6 per cent on the day of election results (June 4).

The industry has added Rs 10 trillion to its AUM in just six months.

“Ten years ago, in 2014, the industry was at Rs 10 trillion. We have now crossed Rs 60 trillion for the first time. Exactly six months ago, we were at Rs 51 trillion, and we have added Rs 10 trillion in this period. The addition in six months is equal to what we were as an industry 10 years ago,” said Anand Vardarajan, chief business officer, Tata Asset Management.

The inflows into other MF categories were also elevated.

Hybrids and passives bought a net Rs 8,855 crore and Rs 14,602 crore, respectively.

MFs’ equity fund inflow tally in the first three months of 2024-25 (FY25) is already half of the total inflows in FY24.

Equity MFs raked in Rs 94,222 crore in the April-June period vis-a-vis Rs 1.84 trillion net inflows in FY24.

In June, thematic and sectoral funds received the highest net inflows at Rs 22,352 crore as 11 new funds were launched in this category.

Multicap and flexicap funds were the next highest grossers at Rs 4,709 crore and Rs 3,059 crore, respectively.

Experts believe that investors may have initially been sceptical of policy continuity as the election resulted in a coalition government. However, the sentiment changed soon, as evident from the market rally.

“The substantial net inflows can be attributed to the election results announced earlier in the month. Initially, there were concerns that a smaller majority for the new government would hinder its ability to enact reforms and fund infrastructure projects. However, investors remained optimistic about policy continuity and anticipated reforms, expecting stability within the coalition government at the Centre. This optimism has propelled the markets to new all-time highs,” said Melvyn Santarita, analyst – manager research, Morningstar Investment Research India.