Equity Mutual Funds continue to receive traction despite market volatility
Equity mutual funds continue to see rising net inflows despite market volatility, while debt mutual funds continue to witness net outflows. Continue reading to learn more.
The growth of the mutual fund industry was flat on Month-on-Month (MoM) basis, while an uptick on Year-on-Year (YoY) basis. The overall mutual fund industry assets under management (AUM) were Rs 39.46 lakh crore in February 2023, higher compared to Rs 37.56 lakh crore in the same month last year.
Equity mutual funds continue to gain traction despite market volatility as it surged higher for the third consecutive month. However, in the case of debt mutual funds, inverse is true. Debt mutual funds continue to witness withdrawal as its net outflow increased from Rs 10,316.15 crore in January 2023 to Rs 13,815.23 crore in February 2023. A rise of 34 per cent on a MoM basis is seen.
Sharing views on the February monthly data, Mr N S Venkatesh, Chief Executive, AMFI stated, “February monthly numbers show positive trend on Equity and Hybrid Funds. Equity mutual funds saw a substantial inflow of Rs 15,685.57 crore as compared to Rs 12,546.5 crore for the month of January and Rs 7,303.39 crore in Dec 2022 reflecting investors' confidence in the growth potential of the Indian economy and their preference for long-term wealth creation through equity investments.
Retail investors continue to enter the markets via the SIP route, which is reflected in the consistent rise in SIP inflows over the last many months. Due to the fact that February has only 28 days, there is a dip seen in SIP contribution numbers as the flows are not recorded for the full month of 31 days.
With the steps taken by the government in the budget and a robust economy, we expect to see a continued positive trend in equity inflows in the coming months."
In terms of AUM, equity mutual funds witnessed a 16 per cent rise while debt mutual funds saw a 13 per cent fall in its assets on YoY basis. Of all the categories in the open-ended mutual funds, AUM of index funds jumped 254 per cent, followed by long duration funds, multi-cap funds and multi asset allocation funds witnessing an uptick in AUM of 160 per cent, 156 per cent and 137 per cent, respectively. In fact, among broader categories, other schemes (consists largely of passive schemes) saw the highest rise in the AUM on YoY basis.
Mutual Fund systematic investment plan (SIP) accounts stood at 6.28 crore. The total amount collected through SIP during February 2023 was Rs 13,686 crore, which is slightly lower than January 2023 (13,856 crore) but higher than February 2022 (11,438 crore).