Thematic funds emerge as largest MF category; AUM doubles in a year

Flexicap slips to the second spot, largecap perched fourth

The sectoral and thematic fund category is now the largest active mutual fund space with its assets under management (AUM) more than doubling in the past year. The category — considered to be the riskiest among MF offerings as its fortunes are linked to a single sector or a theme — has seen its AUM touching Rs 4.21 trillion in July from just Rs 2 trillion in July 2023.

The sharp surge in AUM, underpinned by robust collections by new fund launches and robust inflows into existing offerings, propelled the fund category to the top position on the AUM league table from fourth place a year ago.

Flexicap funds, which occupied the top position until June, is only closely behind. 

The midcap category, the second-largest AUM gainer in absolute terms in the past year, has gone past largecap funds.

Its AUM stood at Rs 3.8 trillion in July as against the Rs 3.6 trillion being managed by largecap funds. 

Smallcap funds remain in the fifth spot despite logging in 72 per cent AUM growth.

The last year has been marked by disproportionate inflows into select few categories.

Smallcap and midcap funds were raking in the lion's share until some months back but the momentum has shifted towards thematic funds in recent months on the back of strong new fund offering (NFO) line-up.

In May, HDFC MF's manufacturing fund collected Rs 9,563 crore. In June, nine new offerings raked in Rs 12,974 crore. Last month, two NFOs that came to a close together collected Rs 9,790 crore.

Changing preferences: Riskier offerings surge ahead
Fund category	AUM* (Rs trillion)	YoY Growth (%)
Sectoral/Thematic	4.2	104
Flexi Cap	4.2	50
Mid Cap	3.8	65
Large Cap	3.6	36
Small Cap	3.1	72
Large & Mid Cap	2.6	65
ELSS	2.5	41
Value/Contra	1.9	67
Multi Cap	1.7	98
Focused	1.5	31
Dividend Yield	0.3	77
Total	29.3	61
Source: Amfi