Which equity and debt funds have seen the highest inflow in the current financial year?

SEBI data has revealed an interesting trend where thematic funds, multi-cap funds and flexi cap funds have recorded higher net inflows than small and mid-cap funds in April to December 2024.

The data shows that sectoral funds have seen the highest net inflows during this period followed by multi cap and flexi-cap funds.

Sectoral and thematic funds have seen the highest net inflows during this period of Rs. 1.32 lakh crore in April-December 2024. Multi-cap funds have seen the second highest net inflows of about Rs. 33,400 crore while flexi-cap funds are next with inflows of Rs. 33,200 crore during this nine-month period.

Large and midcap funds are fourth with inflows of Rs. 30,800 crore during this period. Mid cap funds and small cap funds are next on the list with inflows of Rs. 29,400 crore and Rs. 28,100 crore, respectively.

Large cap funds have received the lowest inflows among all major scheme categories of about Rs. 15,100 crore. Overall, equity funds have seen net inflows of Rs. 3.23 lakh crore during this nine-month period.

Let us look at the table to know net inflows in each scheme category in April 2024 to December 2024.

Mumbai MFD Sadashiv Phene thinks that until last year, investors were choosing small and mid cap funds due to high returns. However, after the market witnessed a correction, investors are not sure about their allocation across market segments and are hence choosing funds like multi cap and flexi-cap funds where the allocation is done by the fund manager.

He believes that the underperformance of large cap companies in the last few years is the main reason for low net inflows in them.

When it comes to high inflows in sectoral and thematic funds, Sadashiv attributes this to the large number of NFOs in the segment as the main reason. He adds that the push given to NFOs by digital platforms and banking channels has led to high inflows. He also emphasizes the investor behavior of young, first-time investors who are only looking at returns in the past 1-2 years and who see NFOs in sectoral and thematic funds as an opportunity to buy a large number of units of these funds at a unit price of Rs. 10, leading to high inflows.  

Kolkata MFD Saibal Biswas thinks that the inflows in small and mid-cap have reduced due to correction in the markets. He adds that due to this correction, investors have become risk-averse and are looking for comparatively low risk schemes like flexi-cap and multi cap.

Chennai MFD Chokkalingam Palaniappan of Prakala Wealth believes that the low inflows in mid and small cap have been due to increasing conversation about these segments being overvalued.

When it comes to low inflow in large cap, he attributes it to many large cap schemes being unable to beat their benchmarks. He adds that due to this, a lot of investors are now moving towards flexi-cap and multi-cap schemes to find a balance between growth and stability.

Debt schemes

Among debt schemes, liquid funds, money market funds and ultra short duration funds have seen the highest net inflows in this financial year till December 2024. Liquid funds lead the way with inflows of Rs. 74,800 crore while money market funds are a close second, recording net inflows of Rs. 69,200 crore.

Ultra short duration funds have also seen high inflows of Rs. 20,650 crore in this period. Low duration funds and corporate bond funds complete the top five with inflows of Rs. 18,300 crore and Rs. 14,100 crore, respectively.

Gilt funds with 10-year constant duration, medium duration funds, floater funds, credit risk funds and banking & PSU funds have all seen net outflows during this period.

Overall, debt schemes have seen net inflow of Rs. 2.19 lakh crore.

Here is the net inflow for each debt scheme in April 2024 to December 2024.