Equity fund inflows jump 15% to Rs 41,156 cr in Dec, SIP book tops Rs 26,000 cr mark: AMFI

Equity fund inflows had hit a record high of Rs 41,887 crore in October despite weak markets.

Open-ended equity mutual fund inflows surged 14.5 percent over the last month to Rs 41,155.91 crore in December, as thematic/sectoral and small-cap funds saw higher investments, data released by the Association of Mutual Funds of India (AMFI) on January 9 showed.

The monthly inflows via systematic investment plan (SIP) topped the Rs 26,000 crore level for the first time in December. The SIP contribution during the month stood at Rs 26,459 crore against Rs 25,320 crore in November.

The SIP AUM was at Rs 13.63 lakh crore for the month of December 2024.

Speaking on the December monthly data release, Venkat Chalasani, Chief Executive, AMFI said, “Despite volatile market conditions, equity-oriented schemes continued to see strong inflows, reflecting investors’ confidence and commitment to stay invested for the long term. This behaviour highlights the growing maturity of investors. The SIP contribution reached an all-time high of Rs 26,459.49 crores in December 2024 reflecting investors' steadfast commitment to their financial goals.”

Inflows into open-ended equity funds stayed in the positive zone for the 46th month in a row.

The rise in equity fund inflows came amid muted market performance during the month. Both the Sensex and the Nifty were down 2.08 percent and 2.02 percent in December.

“Industry number came is about Rs 6,000 crore higher than previous month. Culmination of NFOs, SIPs and lumpsum purchase led to an increase net sales numbers. Investor confidence on mutual funds are an efficient tool for investments continue to remain strong. Increasing product suite is facilitating investors to take an investment call basis their risk profile,” said Manish Mehta, National Head - Sales, Marketing & Digital Business, Kotak Mahindra AMC.

Equity funds

In the equity segment, the Sectoral/Thematic Funds category saw doubling of inflows on a month-on-month (MoM) basis to Rs 15,331.54 crore in December.

The higher inflows were primarily driven by collections done by new fund offers (NFOs) during the month. A total of 12 NFOs mopped up Rs 11,337 crore during December.

Key NFOs during the month were Aditya Birla Sun Life Conglomerate Fund; Axis Momentum Fund; Bajaj Finserv Healthcare Fund; Bank of India Consumption Fund; ICICI Prudential Equity Minimum Variance Fund; SBI Quant Fund.

Further, net inflows into the Small Cap Fund category jumped 13.5 percent to Rs 4,667.70 crore.

Notably, Multi Cap, Large Cap and Large & Mid Cap Fund categories saw drop in inflows.

Debt funds

In the fixed-income segment, debt saw net outflows of Rs 1,27,152.63 crore.

In the segment, the liquid fund category saw net outflows of Rs 66,532.12 crore, followed by Rs 25,842.96 crore selling in the Money Market Fund segment. The Overnight Fund segment also saw net outflows of Rs 22,347.58 crore.

On the other hand, small net buying was seen in Long Duration Fund and Gilt Fund categories.

"In December, being a quarter-end month, debt-oriented mutual funds experienced significant outflows, with a net outflow of INR 1,27,152.63 crore, compared to an inflow of INR 12,915.90 crore in November. Notably, despite this, debt funds recorded net inflows for CY 2024, breaking a trend of three consecutive years of net outflows," said Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India.

Hybrid funds

In the hybrid fund category, which invests in more than one asset class within the same fund, the net inflows remained stable at Rs 4,369.78 crore, a growth of 6 percent over November 2024.

Dynamic Asset Allocation/Balanced Advantage and Multi Asset Allocation Fund categories saw net inflows of Rs 1,596.12 crore and Rs 2,574.72 crore, respectively. While Conservative Hybrid Fund and Arbitrage Fund segments continued to see outflows.

"This could be a year where hybrid products gain prominence, as asset allocation becomes increasingly important. The debt side of hybrid funds, coupled with commodities like gold, could generate solid returns amid global volatility," said Suranjana Borthakur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India).

Gold funds

The Gold Exchange-Traded Fund (ETF) category continues to draw investor attention as it received a net inflow of Rs 640 crore in December, however, it was significantly lower than the net inflow of Rs 1,257 crore it received in November.
The lesser quantum of net inflows could be due to investor shifting their focus towards equity markets as the correction there offered a good buying opportunity.

Through the calendar year 2024, Gold ETF category received a net inflow of Rs 11,226 crore compared with the net inflow of Rs 2,920 crore in 2023, which is a surge of 284 percent.

“However, while the fund mobilized was significantly less compared to November, the redemption number was marginally higher. This signifies that investors would have chosen to book profits with gold trading at elevated levels and impending marriage season, where the demand for physical gold is high,” said Himanshu Srivastava – Associate Director- Manager Research, Morningstar Investment Research India.

Overall, open-ended mutual funds saw net outflows of Rs 80,509.20 crore in December as against Rs 60,363.70 crore a month back.

The Indian mutual fund Industry’s net assets under management stood at Rs 66.93 lakh crore as against Rs 68.08 lakh crore in this period.

Earlier, open-ended equity mutual fund inflows dropped to Rs 35,943.49 crore in November, down 14.2 percent from the previous month, as investments into large-cap and thematic/sectoral funds cooled off.

Notably, equity fund inflows had hit a record high of Rs 41,887 crore in October despite weak markets.