Indian mutual fund industry posts stellar growth in inflows across most fund categories

While debt mutual funds witnessed net inflows after two consecutive months of outflows, equity mutual funds as a category witnessed inflows more than doubling on a year-on-year basis.

The net Assets under Management (AUM) of the Indian mutual fund industry grew by 18 percent to touch Rs 46.72 lakh crore as of October 31, 2023, up from Rs 39.50 lakh crore as of October 31, 2022.

Average Assets under Management (AAUM) of the industry stood at Rs 47.80 lakh crore for the month of October 2023, as against Rs 39.53 lakh crore in October 2022.

Net inflows into equity-oriented schemes grew by 113 percent at Rs 19,957 crore in October, up from Rs 9,390 crore in the same period last year. Sequentially, inflows grew by nearly 42 percent from Rs 14,091 crore in September this year.

While all equity fund categories recorded good net inflows, small caps and gold ETFs clearly were outperformers, ICRA Analytics, the analytical wing and wholly owned subsidiary of ICRA Ltd, said.

Among the growth/equity-oriented schemes, the small cap funds witnessed inflows to the tune of Rs 4495 crore, up from Rs 2678 crore in September this year.

Sectoral/thematic funds saw net inflows of Rs 3896 crore; mid-cap funds at Rs 2409 crore while multi-cap funds saw inflows to the tune of Rs 2911 crore.

Gold ETFs (exchange traded funds) registered 472 percent growth in net inflows at Rs 841 crore in October this year, as against Rs 147 crore in the same period last year.

Debt mutual funds, which had witnessed a huge surge in net outflows at Rs 1.01 lakh crore in September this year, saw inflows to the tune of around Rs 42,634 crore in October, with 11 out of 16 fund categories witnessing inflows during the month.

Commenting on the latest AMFI data, Ashwini Kumar, Head Market Data, ICRA Analytics said, “Net inflows during the month of October 2023 has grown by a whopping 473 percent at Rs 80,528 crore, as against Rs 14,047 crore in October 2022. The industry had registered net outflows of Rs 66,192 crore in September 2023.

"Debt mutual funds, which had witnessed a huge surge in net outflows at Rs 1.01 lakh crore in September, saw inflows to the tune of around Rs 42,634 crore in October while equity funds registered net inflows of Rs 19,957 crore.

After a short blip last month, small cap funds have witnessed higher inflows to the tune of around Rs 4495 crore, up from Rs 2678 crore in September. For a country to grow it should grow intrinsically strong and adopt a bottoms-up approach.

The government is focusing on this and is making policies to strengthen small companies. This is likely to augur well for small and mid-sized firms and would help in higher value creation.

SIP growth has also been very healthy, and it is expected to witness higher traction backed by the growing aspirations of people.