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Equity funds continue to gain traction from investors as net inflows not only remained positive across fund categories but also increased by 25%. They jumped from Rs. 12,547 crore in January 2023 to Rs. 15,686 crore in February 2023.
One of the reasons for rise in net inflows was NFOs. Two NFOs - Axis Business Cycle Fund and Kotak Banking and Financial Services Fund collectively received over Rs. 2,500 crore. The overall inflows in this fund category was Rs. 3,855 crore.
Notably, five other categories - small cap, multi cap, mid cap, flexi cap and large & mid cap saw net inflows of over Rs. 1,000 core each. Tata Multicap Fund, ITI Flexi Cap Fund and Mirae Asset Flexi Cap Fund were the new launches in these categories, which collectively mobilised Rs. 2,508 crore.
At an industry level, the average AUM stood at Rs. 40.69 lakh crore as on February 2023.
Here are the other key data points
Redemptions in debt funds increase
- Overall monthly trend - Outflows from debt funds increased from Rs. 10,316 crore in January 2023 to Rs. 13,815 crore in February 2023 mainly due to institutional withdrawals and the rising interest rate scenario.
- February 2023 figures - Liquid funds reported the highest outflows of Rs. 11,304 crore followed by ultra short duration funds (Rs. 2,430 crore), low duration funds (Rs. 1,904 crore) and floater funds (Rs. 1,665 crore).
Hybrid funds report a downward trend but stay positive
- Overall monthly trend - The net inflows dipped from Rs. 4,492 crore to Rs. 460 crore.
- February 2023 figures - Multi asset allocation funds received the highest inflows of Rs. 511 crore. In fact, all other categories except equity savings fund and conservative hybrid fund saw positive flows.
Index funds report rise in inflows
- Overall monthly trend - While the net inflows increased by 7% in the case of index funds, ETFs also saw net inflows after a few months of outflows.
- February 2023 figures - Index funds saw net inflows of Rs. 6,244 crore while ETFs (gold and others) recorded net inflows of Rs. 194 crore.
SIP and folio count rise, however, monthly SIP flows decline
- Overall monthly trend - The number of SIP accounts and folio count increased by 6.63 lakh and 14.07 lakh respectively. However, SIP inflows marginally dipped by Rs. 170 crore.
- February 2023 figures - While total SIP accounts were 6.28 crore, monthly SIP contribution stood at Rs. 13,686 crore, slightly lower than last month.
Industry experts share their views
Commenting on the equity inflows, Akhil Chaturvedi, Chief Business Officer, Motilal Oswal MF said, “Overall, investors continue to maintain faith in India’s growth potential and tap the current opportunity in markets to add to positions.”
Manish Mehta, National Head and Sales, Marketing & Digital Business, Kotak MF spoke about the SIP trend. He said, “SIP numbers continue to remain strong. This is because of continuous awareness being created by distribution community on long term benefits of investing through SIP and staying invested.”
N S Venkatesh, Chief Executive, AMFI said, “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.”
He concluded, “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.”
