New Delhi, Strong, incessant net flows and favourable market conditions propped up the assets base for the small-cap mutual fund category to cross Rs 2 lakh crore mark in November-end, a sharp surge of 69 per cent from a year earlier. On a month-on-month basis, the Assets Under Management (AUM) of the category grew 10 per cent to Rs 1.99 lakh crore, data with the <keyword id="826589" type="General" weightage="80" keywordseo="association-of-mutual-funds" source="Orion">Association of Mutual Funds</keyword> in India (AMFI) showed. Since the fourth quarter of 2019-20, the AUM for the category has seen a phenomenal rise, due to favourable market movement, along with record net inflows. Small-cap funds attracted Rs 37,178 in this year (till November). This includes Rs 3,699 crore last month and a record fund infusion of Rs 4,495 crore in October. On the other hand, the large-cap category saw a pull out of Rs 2,688 crore in the first 11 months of this year. "A few fund houses have limited the inflows in their small-cap funds over the last quarter given the sharp rise in flows and concerns on valuations," <keyword id="112974" type="General" weightage="80" keywordseo="morningstar-india" source="Orion">Morningstar India</keyword> had mentioned in its September quarterly report. Going by the AMFI data, the asset base of the small-cap mutual fund hit its peak of Rs 2.2 lakh crore at the end of November. Additionally, investor accounts in the category, too, climbed a staggering 62 lakh folios to 1.6 crore in November from 97.52 lakh a year-earlier. This shows that investors have become more inclined toward small-cap funds. Under Sebi's rule, in small-cap mutual funds, fund managers are required to invest at least 65 per cent of their portfolios in small-cap stocks. <keyword id="2252616" type="General" weightage="80" keywordseo="g-pradeepkumar" source="Orion">G Pradeepkumar</keyword>, CEO, <keyword id="6536298" type="General" weightage="80" keywordseo="union-asset-management-company" source="Orion">Union Asset Management Company</keyword>, suggested that investors stagger their investments in small- and mid-cap funds in view of the possibility of short-term volatility. Overall, the AUM of the 42-player mutual fund industry reached Rs 49.04 lakh crore in November-end from Rs 40.37 lakh crore in November 2022, suggesting a gain of 22 per cent.

Consistent inflows push small-cap funds AUM past Rs 2 lakh cr mark in Nov

<ul><li>The Assets Under Management (<keyword id="135675" type="General" weightage="20" keywordseo="aum" source="Orion">AUM</keyword>) stood at ₹50.78 lakh crore at the end of December. </li><li>Inflows into equity <keyword id="6357979" type="General" weightage="20" keywordseo="mutual-funds" source="Orion">mutual funds</keyword> totalled ₹16,997 crore in December, up from ₹15,563 crore in November. </li><li>SIP inflows in December steady at ₹17,610 crore, compared to ₹17,073 crore in November. </li></ul>With the bulls dominating the equity market, <keyword id="35474" type="General" weightage="20" keywordseo="debt-funds" source="Orion">debt funds</keyword> registered a substantial outflow of ₹75,560 crore In December, up from ₹4,707 crore in November, according to the data by Association of Mutual Funds in India(AMFI). Debt fund outflows had reached ₹1.01 lakh crore in September driven by an outflow in liquid mutual funds. After two consecutive months of net outflow, debt funds had seen an inflow of ₹42,634 crore in October. On the other hand, inflows into equity mutual funds totalled ₹16,997 crore in December, up from ₹15,563 crore in November, clearly showing that investors are open to taking more risks. This was led by multi-cap funds which saw an inflow of ₹1,851 crore. Small and mid-caps showed strong inflows too at ₹3,857 and ₹1,393 crore, continuing their good run. However, <keyword id="509662" type="General" weightage="20" keywordseo="large-cap-funds" source="Orion">large cap funds</keyword> recorded an outflow of ₹280 crore, down from an inflow of ₹306 crore in November. Says G. Pradeepkumar, CEO, Union Asset Management Company Pvt, “The net flows into equity funds have increased in December indicating sustained investor interest in equity mutual funds. SIP numbers also remained robust at more than ₹17,000 crores for the second consecutive month. With the expectations of high economic growth and political continuity, investors appear to be becoming increasingly confident about the prospects of Indian equity market.” Equity mutual fund inflows in 2023 <table style="border-width: initial; border-style: none;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Month </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Inflow into equity funds </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">January-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12,546 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">February-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹15,685 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">March-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹20,534 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">April-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹6480 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">May-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,906 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">June-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹8,637 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">July-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹7,505 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">August-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹20,133 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">September-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹14,091 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">October-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹19,932 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">November-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹15,536 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">December-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹16.997.09 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> When the markets perform positively, investors often display a greater inclination towards risk-taking. Buoyed by optimism and perceived opportunities for higher returns, they may venture into riskier investments, seeking to capitalise on the market's momentum. SIP inflows in December stood at ₹17,610 crore, compared to ₹17,073 crore in November, crossing ₹17,000 crore in two consecutive months. The overall Assets Under Management (AUM) hit a milestone crossing the ₹50 lakh crore mark for the first time in December (₹50.78 lakh crore). The reading has more than doubled in the past five years. The equity AMC stood at ₹21.8 lakh crore compared to ₹20.3 lakh crore in November. 2023 was the year when<a href="https://www.businessinsider.in/personal-finance/news/retail-investors-come-of-age-in-2023-with-small-and-midcap-funds-outperforming/articleshow/106339303.cms"> retail investors came of age</a>. During the first nine months of 2023, there was an inflow of ₹124,053 crore into equity mutual funds, signalling a strong confidence among domestic investors in the potential of the equity market.

Debt funds register outflow of over ₹75,000 crore in December; total AUM crosses a milestone

The month of November has seen a 22% decrease in the funds flowing into equity-oriented <keyword id="6357979" type="General" weightage="20" keywordseo="mutual-funds" source="Orion">mutual funds</keyword>, according to data from the Association of Mutual Funds of India (<keyword id="6359050" type="General" weightage="20" keywordseo="amfi" source="Orion">AMFI</keyword>), the mutual fund industry's trade body. <keyword id="35475" type="General" weightage="20" keywordseo="equity-funds" source="Orion">Equity funds</keyword> registered investments totaling ₹15,536.42 crore, marking a decrease of about 22.15% from the ₹19,957.17 crore recorded in October. It is important to note that equity inflows in October registered a substantial 44% month-on-month rise from Rs 14,091 crore. The total assets under management (AUM) for equity funds stood at ₹49 lakh crore in November, up from ₹47.8 lakh crore in October. Meanwhile AUM of equity funds were at an all time high of ₹20.3 lakh crore. It's interesting how despite foreign investors exercising caution, the domestic retail investors have taken the lead in boosting capital inflows into equity-oriented schemes in India. This demonstrates a certain level of confidence and participation from within the country's investor base. The significant amount of ₹124,053 crore invested in the first nine months of 2023 indicates a strong interest and belief in the potential of the equity market among domestic investors. <table style="border-width: initial; border-style: none;"><colgroup></colgroup><col /><col /><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Month </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Inflow into equity funds </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">January-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12,546.51 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">February-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹15,685 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">March-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹20,534 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">April-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹6480 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">May-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,906 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">June-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹8,637 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">July-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹7,505 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">August-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹20,133 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">September-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#f7fafc;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹14,091 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">October-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹19,932 crore </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">November-23 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹15,536 crore </td></tr></tbody></table> Investments in systematic investment plans (<keyword id="159805" type="General" weightage="20" keywordseo="sips" source="Orion">SIPs</keyword>) reached record levels, going past ₹17,000 crore for the first time. “While there appears to have been some level of profit booking, the SIP numbers have continued to grow and have hit an all time high. This reflects the continued faith of retail investors in the equity markets and in the mutual fund industry,” says G. Pradeepkumar, CEO, Union Asset Management Company. Inflows into small cap and mid-cap funds remained strong. White inflows into small cap funds fell from ₹4,495 crore in October to ₹3,699 crore in November, flows into mid-cap funds went up from ₹2,409 crore in October to ₹2,666c crore in November. Inflow into ELSS funds fell sharply from ₹266 crore in October to ₹104.4 crore in November. Sectoral funds which had seen an inflow of ₹3,895.72 in October, saw an inflow of ₹1,964 crore in November. The total outflow into debt schemes reached ₹4,706.7 crore, marking compared to ₹42,634 crore. Last month,. Similarly, liquid funds experienced an outflow of ₹644.7 crore in November, in contrast to an inflow of ₹32,964 crore seen in October.

Retail inflow into equity funds fall 22% in November

<ul><li>Investments in gold ETFs grew by a whopping 472% at ₹841 crore in October ‘23.</li><li>Despite words of caution by experts, <keyword id="6416579" type="General" weightage="20" keywordseo="retail-investors" source="Orion">retail investors</keyword> continue to bet on midcap funds for better returns, thanks to government policies.</li><li>The weight of automobiles in overall allocation jumped to an almost 5-year high of 8.4% (up 10 bps MoM and 70 bps YoY) in October 2023. </li></ul> All that glitters is gold when it comes to the festive season in India. A month ahead of Diwali, retail investors chose to tank up on gold funds, going by data released by the Association of Mutual Funds of India (AMFI). Moreover, the weightage on sectors like auto, utilities and insurance stocks increased significantly while sectors such as banking saw a moderation. Investments in gold ETFs (exchange traded funds) grew by a whopping 472% at ₹841 crore in October compared to ₹147 crore in the same period last year. But that is not all, retail investors are now mature and picking themes with a view on higher value creation over the long term. The month of October reflects this trend quite clearly. As large caps continue to struggle, retail investors continue to bulk up on small and midcap funds that have already delivered over 40% returns this year. After a short blip in September, small cap funds attracted higher inflows to the tune of around ₹4,495 crore in October, up from ₹2,678 crore in September. According to ICRA Analytics, for a country to grow it should grow intrinsically strong and adopt a bottoms-up approach. The government is focusing on this and is making policies to strengthen such small companies. This is likely to augur well for small and mid-sized firms and would help in higher value creation. G. Pradeepkumar, CEO, Union Mutual Fund, says: “If one takes into account the allocations to mid and small caps in categories such as multicap, flexicap and large &amp; mid Cap, it appears that anywhere from 40% to 50% of the total net flows could have gone to mid and small-cap stocks. While the long-term outlook for these companies is positive, investors should remain cautious about the possibility of short-term market volatility and consider a staggered approach to their investments.” It is not just betting on smaller stocks that will lead to higher value creation that shows that the Indian retail investor has evolved. Analysis shows that the pace of redemptions slowed down to Rs 26,000 crore (down 14.8% month-on-month). Consequently, net inflows accelerated to ₹22,000 crore in October from ₹15,500 crore in September 2023. Financialisation of savings is a big trend that has been playing out since 2016 in India. The retail investor’s faith in the India story has not faded despite the headwinds. Explains Ashwini Kumar, Head Market Data, ICRA Analytics, “Net inflows during the month of October 2023 have grown by a whooping 473% at ₹80,528 crore, as against ₹14,047 crore in October 2022.” The sectoral shift The story gets even more interesting when one digs deeper into the monthly flows. Net inflows into equity-oriented schemes grew by 113% at ₹19,957 crore in October, up from ₹9,390 crore in the same period last year. According to analysis done by Motilal Oswal Financial Services (MOFS), the month saw notable changes in the sector and stock allocation of funds. Retail investors are doubling down on automobiles, utilities, consumer and insurance sectors. On a MoM basis, the weights of all these sectors increased while that of banks (Private &amp; PSU) , technology, capital goods, and metals moderated. The weight of automobiles jumped to an almost five-year (59-month) high of 8.4% (up 10 basis points month-on-month and +70 basis point year-on-year) in October 2023. Utilities’ weight climbed for the second consecutive month to a 38-month high of 3.9% (+10bp MoM, +60bp YoY), says MOFS. The weightage for private banks moderated for the fourth consecutive month to 18.7% (-20bp MoM, flat YoY) in October 2023. PSU Banks overall weight declined to 3% (-20bp MoM, -70bp YoY) and this is the lowest since February 2021.

It’s not banks but insurance that the retail investors now fancy

<ul><li>Rise in valuations could have made investors stay away from fresh investments or take advantage of the rally, said Sriram BKR, senior investment strategist at Geojit Financial Services.</li><li><keyword id="151916" type="General" weightage="20" keywordseo="debt-mutual-funds" source="Orion">Debt mutual funds</keyword> saw overall net inflows of ₹1.06 lakh crore in April.</li><li>Analysts believe that the interest in debt mutual funds is due to increased investor interest in <keyword id="1015516" type="General" weightage="20" keywordseo="fixed-income-products" source="Orion">fixed income products</keyword>.</li></ul>Inflows into the <keyword id="6361918" type="General" weightage="20" keywordseo="equity-mutual-funds" source="Orion">equity mutual funds</keyword> hit a four-month low in April, as investors booked profits after a rally in March. As per data by Association of Mutual Funds in India (AMFI), inflows into MFs slumped 68% to ₹6,480 crore in April as compared to March when they were at ₹20,534 crore. The last time the inflows were lower than April were in November 2022, when the flows stood at around ₹2,258 crore. Benchmark index Sensex rallied nearly 4% in the month of April leading for investors to book profits. “The dip in net flows could be attributed to a sharp drop in gross purchases month-on-month at -34% and a steady rise in redemptions at 9% month-on-month. The rise in valuations could have made investors stay away from fresh investments or take off some money to take advantage of the rally,” said Sriram BKR, senior investment strategist at Geojit Financial Services. Inflows in the equity mutual funds during April were led by <a href="https://www.businessinsider.in/stock-market/news/mutual-funds-raise-bets-on-mid-small-cap-stocks-amid-volatile-markets/articleshow/98516460.cms">consistent flows in small and mid cap funds </a>at ₹2,182 crore and ₹1,790 crore respectively. Some experts are optimistic that the net inflows would pick up in the next few months as April is relatively a quiet month. "It is encouraging that the flows have remained positive in April. Historically, April is a relatively quiet month after the hectic activity in March. So not too much should be read into the net flows being lower compared to March. We are confident that the momentum will pick up in the coming months,” G Pradeepkumar, CEO at Union Asset Management Company said. Investors prefer fixed income products over equity funds amid volatility On the other hand, debt mutual funds saw overall net inflows of ₹1.06 lakh crore in April due to strong flows in liquid funds that received inflows of ₹63,219 crore, followed by money market funds at ₹13,960 crore. In March, debt MF saw outflows of ₹56,884 crore. Analysts read the strong inflows in debt funds as increased investor interest in fixed income products than in equity funds that are facing volatility. “Also, the data for April 2023 shows that investors preferred fixed income as a preferred choice of investment than equity oriented options,” added Sriram. Further, in April, the contribution of retail investors through SIPs fell to ₹13,727 crore from ₹14,276 crore in March. In March SIP flows had hit an all-time high crossing the ₹14,000 crore mark after inflows of ₹13,686 crore in February and ₹13,856 crore in January. Meanwhile, gold ETFs saw inflows of ₹124 crore in April as compared to outflows of ₹266 crore in March given <keyword id="46002" type="General" weightage="20" keywordseo="gold-prices" source="Orion">gold prices</keyword> have been rising. Other ETF categories saw inflows of ₹6,790 crore as this includes silver ETFs as well which has gained a huge traction after a jump in <keyword id="85550" type="General" weightage="20" keywordseo="silver-prices" source="Orion">silver prices</keyword>. In March, other ETFs categories saw outflows of ₹330 crore. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/sajjan-jindal-led-jsw-infra-would-be-the-third-group-company-to-go-public/slidelist/100156198.cms">JSW Infrastructure to come out with ₹2,800 crore IPO; third group company to go public</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/income-tax-department-raids-freshly-listed-mankind-pharmas-premises-over-alleged-tax-evasion/articleshow/100155544.cms">Income Tax department raids freshly listed Mankind Pharma’s premises over alleged tax evasion</a>

Inflows into equity mutual funds hit a 4-month low in April: AMFI

<ul><li>Inflows into equity-oriented <keyword id="6357979" type="General" weightage="20" keywordseo="mutual-funds" source="Orion">mutual funds</keyword> hit a 12-month high in March 2023 at ₹20,534 crore.</li><li>These strong flows in March were aided by constant investments into <keyword id="917586" type="General" weightage="20" keywordseo="Thematic-funds" source="Orion">thematic funds</keyword> and dividend yield funds, at ₹3,928 crore and ₹3,715 crore respectively.</li><li>Contribution of retail investors through SIPs hit a record high of ₹14,276 crore in March as compared to ₹13,686 crore in February and ₹13,856 crore in January.</li></ul>Inflows into equity-oriented mutual funds hit a 12-month high in March 2023 at ₹20,534 crore aided by strong flows into thematic funds and record retail investor contribution through SIPs, as per Association of Mutual Funds in India (AMFI) data released on Thursday. The inflows in March 2023 were the highest since last March, when ₹28,463 crore flowed into equity-oriented funds on the back of robust SIP (systematic investment plan) flows. In February 2023, this number was ₹15,685 crore. Strong flows into equity-oriented funds were aided by constant flows in thematic funds and dividend yield funds, at ₹3,928 crore and ₹3,715 crore, respectively, in March 2023. Thematic funds have created a buzz among investors given inflows into sectoral/thematic funds have seen a four-fold jump from January levels of ₹903 crore. They rose to ₹3,856 crore in February 2023 and hit ₹3,928 crore in March. In the last six months, <a href="https://www.businessinsider.in/stock-market/news/12-equity-oriented-thematic-mfs-launched-in-the-last-6-months/slidelist/98900160.cms">12 new funds have been launched </a>in the thematic schemes category with multinational companies (MNC) fund, dividend yield fund and business cycle fund catching investors’ attention. Such funds are popular because investors are looking for value creation options beyond benchmark indices and thematic funds offer investors an opportunity to broaden their investment options. Contribution of retail investors through SIPs hit a record high of ₹14,276 crore in March as compared to ₹13,686 crore in February and ₹13,856 crore in January. “The SIP amount also has hit an all-time high of ₹14,276 crore in March. This reinforces our belief that domestic investors continue to have high levels of confidence in the Indian growth story and also in mutual funds as an effective vehicle for wealth creation,” said G Pradeepkumar, CEO at Union Asset Management. Debt funds continue to see outflows Meanwhile, debt funds continue to witness strong outflows at ₹56,884 crore in March, a four-fold jump from ₹13,815 crore outflows in February. In January the outflows were at ₹10,316 crore. The waning interest in debt funds comes as the Finance Bill proposed to do away with <a href="https://www.businessinsider.in/business/news/debt-schemes-of-mfs-lose-edge-over-bank-deposits-as-budget-proposes-to-scrap-ltcg-indexation-benefits/articleshow/98965932.cms">long-term capital gains tax benefits on debt investments</a>. As per the proposed changes in the Finance Bill, investors in debt funds will have to pay tax according to their income slabs. Investors had so far benefited from indexation while calculating long-term capital gains from debt funds but this will no longer be available from April 1, 2023. "Mutual Funds witnessed significant AUM (assets under management) churn in March 2023 on the back of changes in tax laws. While the cash category saw outflow of nearly ₹65,000 crore, which is typically a year-end phenomenon, the arbitrage funds and funds with maturity of less than 1 year saw outflows of about ₹12,000 crore and about ₹28,000 crore respectively,” said Ajaykumar Gupta, chief business officer at Trust Mutual Fund. Investors aggressively pulled money out of liquid funds, money market funds, ultra-short-duration funds and overnight funds in March 2023. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rbi-bats-for-borrowers-releases-guidelines-to-lenders-from-levying-penal-interest-on-loan-defaults/articleshow/99461008.cms">RBI bats for borrowers, releases guidelines to prevent lenders from levying penal interest on loan defaults</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/indias-oldest-billionaire-started-his-business-after-returning-from-lic/articleshow/99460993.cms">India’s oldest billionaire started his business after returning from LIC</a>

Inflows into equity MFs hit 1-year high in March on robust SIP and thematic fund investments

<ul><li>Investors have turned cautious at this stage due to uncertainty around the US recession.</li><li>This had led them to choose large caps as ‘best among equals’ over midcaps.</li><li>Another reason for the recent fall in mid caps could be that their valuations have been going so a higher level of correction was expected anyway, say experts.</li></ul>Stocks markets are seeing a huge selloff across sectors and domains. But a general trend has been that the fall in midcap stocks is steeper than it is in the large cap stocks. Due to the uncertainty around a possible recession in the US and its effect on Indian stocks, investors in general have turned cautious. At this stage, they have chosen large caps as ‘best among equals’ over midcaps. Another reason could be that midcaps valuations have been going up and what’s visible in the market now is possibly a fair value, say experts. Mid caps also tend to move sharply due to lower stock volumes. “They had really gone up too much at one stage compared to the large cap, so a higher level of correction was expected anyway. Inherently <keyword id="44748" type="General" weightage="20" keywordseo="mid-cap" source="Orion">mid cap</keyword> and small caps will be more volatile compared to large caps in a few months because they are riskier, less liquid and therefore move on smaller volumes,” G Pradeepkumar, CEO of Union Asset Management Company told Business Insider. The sentiment selloff could bottom out The extensive FII outflow to the tune of ₹2.07 lakh crore that we have seen in the last six months too had no effect on midcap valuations, as per experts. According to Vikaas M Sachdeva, CEO of Emkay Investment Managers, what is happening now is normal market condition-driven selloff. “FIIs in any case are not present in most midcaps, they are present only in the larger mid caps. Domestic mutual funds are there but because the flow is strong in SIPs so there is no selling pressure here. If it is sentiment driven then there is no structural issue as such and it will bottom out soon,” Vikaas M Sachdeva, CEO of Emkay Investment Managers, told Business Insider. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"><colgroup></colgroup><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Indices </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Returns in last 1-month </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sensex </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-4.29% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nifty 50 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-4.75% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BSE Mid cap </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-5.68% </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> The earnings upcycle After a possible bottoming out of sentiment, the next phase of valuations will depend on earnings - as investors will turn into a wait and watch mode. “Interest rates and ensuing discussion around it has already started getting factored in stock prices. Now the market is looking at the next set of results, which even if they are decent and not spectacular, it's fine as there are a lot of concerns around inflation that would affect the profitability of certain companies. My sense is you could probably see a bottoming out happening and results might be decent and it will not be as bad as expected,” added Sachdeva. The MF downturn angle However, more allocations into the midcaps by mutual funds might however remain tepid. Midcap and smallcap funds outperform in an up-cycle while underperform in a down-cycle, says a report by ICICI Securities. “While it is difficult to predict till how long the current market cycle would continue, it is prudent to adopt a cautious approach while making a fresh allocation in midcap/smallcap funds. In the current uncertain and extremely volatile environment, it is important to follow discipline of not getting carried away by the market fall,” says the report. Unlike in the case of large caps, fewer people and funds alike are interested in buying the dip. While mutual funds themselves face no fund crunch, a lot of back and forth could happen in small and midcap stocks – which means there would be more volatility even after sentiment dies down and earnings don’t necessarily disappoint. “Redemptions at the mutual fund level are not happening. Some of the less liquid mid caps and small caps are being affected more but better quality mid caps are less effective but then they are expensive. Hence we can definitely expect volatility in mid cap and small in near term,” added Pradeepkumar. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[<blockquote class="stocktwits-embedded-post" data-origin="https://stocktwits.com" data-id="467778348"> $NIFTYMIDCAP100.NSE: Corrected 25 per cent from its lifetime high, whereas the benchmark, corrected only 18 per cent. And, it is trading near the 38.2% retracement level of the prior uptrend. Expect to retrace at least 50% (21996) to 61.8% (19342) which is equal to 34- 42 per cent from its top, which is a reasonable correction. Jan 2018 - March 2020 correction was 51%. In the 2088 crisis, the Midcap-100 corrected 70%. For now, stay away from Midcaps and SmallCaps. &mdash; (@brahma_chary) <a href="https://stocktwits.com/brahma_chary/message/467778348"> June 23, 2022</a></blockquote><script async src="https://stocktwits.com/min/widgets.js" charset="utf-8"></script>]]></cdata></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/the-dramatic-end-of-the-great-indian-nautanki-company/articleshow/92382208.cms">Micheal Jackson concert to Shah Rukh Khan shows – the dramatic end of The Great Indian Nautanki Company</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sustainability/article/not-just-health-tobacco-products-also-degrades-ecosystem-integrity-who-report/articleshow/92380121.cms">Not just health, tobacco products also degrades ecosystem integrity: WHO report</a>

Mid cap stocks will remain under pressure for few more months, say experts

New Delhi, Feb 12 () Investors pumped Rs 1.2 lakh crore into various mutual fund schemes in January, after pulling out a massive Rs 62,000 crore in the preceding month, primarily on account of infusion in liquid and overnight schemes. Mutual fund inflows will gather further momentum in the coming months, Union Asset Management Company CEO G Pradeepkumar said. According to data by the Association of Mutual Funds in India (Amfi), net inflow of Rs 1.2 lakh crore was witnessed in mutual fund schemes last month as compared to an outflow of Rs 61,810 crore in December. Fund managers attributed the growth in asset base to strong inflow of around Rs 1.09 lakh crore in debt-oriented schemes. Among debt-oriented schemes, liquid funds, with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon, received flows worth about Rs 59,683 crore, the highest among the fixed-income segment last month. In addition, overnight funds, which invest in securities with maturity of one day, received inflow of about Rs 22,652 crore. "On the fixed-income side one of the noticeable trends is a shift away from liquid funds toward overnight funds. With the introduction of exit load in liquid funds and certain additional restrictions that will come into effect from April 1, 2020, we expect this trend to continue," Pradeepkumar said. The open-ended equity and equity-linked saving schemes witnessed an infusion of Rs 7,877 crore, while there was an outflow of Rs 330 crore in close-ended equity plans, taking total equity inflows to Rs 7,547 crore last month. In December, net inflows in such schemes stood at Rs 4,432 crore. Small-cap, mid-cap and large-cap funds saw inflows of Rs 1,073 crore, Rs 1,798 crore and Rs 1,154 crore, respectively, in January. It is interesting to note this flow is well spread between the category of funds such as large-cap, mid-cap and multi-cap, among others. During January 2020, Nifty Midcap 100 and Nifty Smallcap 100 rose 5.31 per cent and 6.71 per cent, respectively. "With overall sentiments improving on the back of softer crude oil prices and lower interest rates as also unconventional steps taken by RBI recently has led to expectations of further softening of interest rates. These factors should help to sustain the growth in equity markets in the near term," Pradeepkumar added. Nippon Life India Asset Management ED and CEO Sundeep Sikka said, "With the Union Budget 2020 and subsequent RBI policy leading several structural changes, we will continue to stay optimistic on the market outlook. The retail investors may continue investing in the markets through SIPs (systematic investment plans), while staying balanced in their investing approach between different asset classes". SPRVK

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Consistent inflows push small-cap funds AUM past Rs 2 lakh cr mark in Nov

PTI

Debt funds register outflow of over ₹75,000 crore in December; total AUM crosses a milestone

BI India Bureau

Retail inflow into equity funds fall 22% in November

BI India Bureau

It’s not banks but insurance that the retail investors now fancy

Malini Bhupta

Inflows into equity mutual funds hit a 4-month low in April: AMFI

Bhakti Makwana

Inflows into equity MFs hit 1-year high in March on robust SIP and thematic fund investments

Bhakti Makwana

Mid cap stocks will remain under pressure for few more months, say experts

Bhakti Makwana

Mutual funds log Rs 1.2 lakh cr inflow in Jan on infusion in liquid schemes

PTI