In September 2024, the Indian mutual fund industry showed significant developments, with varied trends across different categories, according to data released by the Association of Mutual Funds in India (AMFI).
The industry’s overall Assets Under Management (AUM) reached an all-time high of ₹67.09 lakh crore, up from ₹66.7 lakh crore in August. The number of mutual fund folios also hit a record high of over 21 crore, reflecting the continued growth of investor participation.
A key highlight was the record SIP (Systematic Investment Plan) contributions, which surged to ₹24,508 crore, surpassing the previous month’s ₹23,547 crore. The total number of SIP accounts also reached a new peak of 9.87 million, underscoring growing investor interest in disciplined, long-term investment strategies.
Commenting on AMFI September data Viraj Gandhi, CEO of Samco Mutual Fund said:
The new normal is growth in multicap and theme funds. September 2024 is seeing an increase in the trend as well. We think that this trend of gaining market share in the small, midcap, multicap, and thematic categories will continue ahead.
Quite fascinating throughout the previous five months, the net asset value (NAV) of midcap funds has overtaken that of large cap funds, and this difference is widening every month. This demonstrates the midcap index’s durability and superior performance to the large cap index.
Over the past 34 months, the multicap category has shown the greatest growth. The MTM effect of the category during the time period and the scheme construct are both responsible for the category’s market share growth from 2.5% to 5.8%.
Even during September 2024, sectoral funds contributed for ₹ 13,254 crores of the total ₹ 34,419 crores of inflows, with multicap funds accounting for ₹ 3,509 crores, large and midcap funds for ₹ 3,598 crores, and flexicap funds for ₹ 3,214 crores.
Due to their subpar performance and inability to draw in bigger inflows relative to their peers, flexicap and large caps are losing their lustre and market dominance.
However, there was a massive withdrawal from debt programs to the tune of ₹ 1,13,833 crores, the largest in the previous six months. These outflows amounted to ₹ 19,362 crores from overnight funds, with ₹ 72,665 crores coming out from liquid funds and ₹ 23,420 crores slipped from the money market funds.
On the other hand, equity mutual funds witnessed a dip in inflows, recording ₹34,419 crore—a 10% decline from August. Despite this, it marked the 43rd consecutive month of positive inflows for equity-oriented funds. Sectoral funds continued to perform well, attracting ₹13,255 crore, driven by investor preference for thematic investments.
In contrast, debt mutual funds saw massive outflows of over ₹1.13 lakh crore, particularly from liquid and money market funds, reflecting shifting investor sentiments due to market volatility.
These trends underscore a dynamic mutual fund landscape in India, with strong investor confidence in SIPs and equities but caution in debt instruments.