Equity Mutual Fund Portfolio Additions Decline Amid Market Correction
Equity Mutual Fund Portfolio Additions Trend Drop from July 2024 Peak Amid Market Correction; Net Equity Inflows Fall 26 per cent in February 2025
The number of new portfolios added to equity mutual funds has shown a steady decline in recent months, aligning with the broader market correction. As per data, the pace of new portfolio additions has slowed significantly, particularly in February 2025, when only 18 lakh new portfolios were added, marking a sharp drop from the peak of over 54 lakh in July 2024.
Monthly Trend in New Portfolio Additions:
Monthly Trend in New Portfolio Additions
|
Month
|
Total No. of Equity Schemes Portfolios
|
Percentage of New Portfolios Added
|
No. of New Portfolios added in the Month
|
|
Feb-24
|
12,00,77,704
|
-
|
3611920
|
|
Mar-24
|
12,28,21,685
|
2.29%
|
2743981
|
|
Apr-24
|
12,55,52,685
|
2.22%
|
2731000
|
|
May-24
|
12,89,47,285
|
2.70%
|
3394600
|
|
Jun-24
|
13,30,32,315
|
3.17%
|
4085030
|
|
Jul-24
|
13,84,98,872
|
4.11%
|
5466557
|
|
Aug-24
|
14,28,75,250
|
3.16%
|
4376378
|
|
Sep-24
|
14,72,49,946
|
3.06%
|
4374696
|
|
Oct-24
|
15,11,97,316
|
2.68%
|
3947370
|
|
Nov-24
|
15,41,54,804
|
1.96%
|
2957488
|
|
Dec-24
|
15,74,96,827
|
2.17%
|
3342023
|
|
Jan-25
|
16,05,74,608
|
1.95%
|
3077781
|
|
Feb-25
|
16,23,74,751
|
1.12%
|
1800143
|
Source: AMFI
he trend clearly indicates a slowdown in investor participation, coinciding with the broader market downturn. According to data from the Association of Mutual Funds of India (AMFI), net equity mutual fund inflows in February 2025 fell by 26 per cent to Rs 29,303.34 crore compared to the previous month.
February 2025 witnessed a steep correction in benchmark indices, with the BSE Sensex falling by 5.55 per cent and the Nifty 50 declining by 5.89 per cent. Factors such as global uncertainties, weak corporate earnings, and slowing economic indicators contributed to this decline. As a result, overall assets under management (AUM) in the mutual fund industry dropped by 4.04 per cent to Rs 64.53 lakh crore from Rs 67.25 lakh crore in January 2025.
Historically, market corrections have led to cautious investor behavior, and the current scenario is no different. The decline in new equity mutual fund portfolios suggests investors are adopting a wait-and-watch approach, reassessing their investment strategies amid volatility.
While market corrections present short-term challenges, they also provide long-term opportunities for systematic investment. If market stability improves, new investor participation in mutual funds could see a resurgence in the coming months.
Disclaimer: The article is for informational purposes only and not investment advice.