Manufacturing funds see second month of outflows; thematic flows hit 9-month low

The report adds that NBFCs were the largest under owned sector among AMCs followed by FMCG, Metals and IT. On the other hand, Insurance, Auto Ancilliaries, Private Bank and Pharma were the most over owned.

After months of strong investor interest, thematic mutual fund schemes reported net inflows of Rs 170 crore, the lowest since its peak of Rs 22,400 crore in June 2024. According to Elara's Domestic Liquidity Tracker, among thematic funds, manufacturing, quant and innovation funds reported outflows. Overall equity inflows also fell to a one-year low of Rs 25,000 crore in March, down from Rs 29,000 crore in February and the all-time high of Rs 42,000 crore in October 2024.

Manufacturing, Innovation funds see outflows

Manufacturing funds saw net outflows for the second consecutive month. For March 2025, net outflows were Rs 284 crore, down from Rs 169 crore in February 2025.

Similarly, Innovation and Quant funds, also reported their first month of net redemptions since mid-2023 at Rs 50 crore and Rs 35 crore respectively.

On the other hand, India Opportunities Funds saw the highest inflows at Rs 705 crore, followed by PSU, Defence, Business Cycle and Momentum.

Among sector-specific schemes, Infrastructure and Energy/Power funds faced the maximum outflows. For the month of March 2025, Infrastructure funds reported Rs 298 crore in outflows from Rs 135 crore inflows in February 2025. Power/Energy funds also reported net outflows of Rs 245 crore down from Rs 1,260 crore in February 2025. Pharma funds reported net outflows of Rs 117 crore, down from Rs 250 crore of inflows in the previous month.

On the other hand, IT saw the highest inflows of Rs 320 crore, followed by Consumer and Banking and Finance.

Small and mid cap remain resilient, but new folios decline
Other equity categories such small-cap and mid-cap funds saw inflows despite heightened market volatility. Small-cap funds reported inflows of Rs 4,100 crore in March. This, according to the report is around 30 percent above their one-year average.

While inflows remained strong, in March, new folio additions in Smallcap funds dropped to 1.82 lakh which is the lowest monthly figure since June 2022. according to the report. Since January 2025, the maximum decline in new folio additions was seen for thematic funds which recorded a 75% decline, followed by Smallcap funds at 67%, and Midcap funds at 63%.

NBFCs most under ownedThe report added that NBFCs were the largest under owned sector among AMCs followed by FMCG, Metals and IT. On the other hand, Insurance, Auto Ancilliaries, Private Bank and Pharma were the most over owned.

Among specific stocks,  Reliance Industries is currently the most under owned, followed by TCS , ITC, Hindustan Unilever, Nestle India, and Suzlon Energy among others. On the other hand, Axis Bank is the most over owned stock followed by Maruti Suzuki, Jindal Steel, SBI Life Insurance and Samvardhana Motherson amongst others.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.