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Mutual Funds Investment Inflows Dip 22 pc; Small, Mid-Caps Still Lure Investors
Mutual fund investment: Investor interest in India's equity mutual funds cooled slightly in November, with inflows tapering by 22.15 per cent However, investors maintained a keen interest in small- and mid-cap funds, betting on their potential for higher returns.
Updated Dec 8, 2023 , 05:50 PM IST
Mutual fund investments: Investor interest in India's equity mutual funds cooled slightly in November (Pic: DALL-E)
Mutual fund investment: Investor interest in India's equity mutual funds cooled slightly in November, with inflows tapering by 22.15 per cent to Rs 155.36 billion, compared to October's Rs 199.57 billion, Reuters reported citing data from the Association of Mutual Funds in India (AMFI). Despite this dip, November marked the 33rd straight month of positive net inflows into these funds.
This moderated influx coincided with Diwali celebrations and several bank holidays, which may have influenced the equity net flows, Manish Mehta, a senior executive at Kotak Mutual Fund, told Reuters. However, investors maintained a keen interest in small- and mid-cap funds, betting on their potential for higher returns.
Year-to-date, equity-oriented mutual funds have attracted an impressive 1.45 trillion rupees, buoying key market indices like the Nifty 50 and BSE Sensex to record levels, with a notable performance uplift in small- and mid-cap sectors.
The Nifty 50 index experienced a 5.52 per cent surge in November, its best performance since July 2022, spurred by favorable liquidity conditions, easing global rate concerns, and robust macroeconomic indicators.
A significant trend in November was the record-high contributions to systematic investment plans (SIPs), reaching 170.73 billion rupees. The number of SIP accounts also peaked at 74.41 million, underscoring the growing popularity of regular mutual fund investments.
In terms of fund categories, small-cap funds continued their dominance for the 14th consecutive month, attracting 36.99 billion rupees. Mid-cap funds also saw a healthy inflow, receiving 26.66 billion rupees. Both categories outperformed significantly, registering 12 per cent and 10.4 per cent growth, respectively, in November.
On a year-to-date basis, small- and mid-cap indices have soared by 48 per cent and 40 per cent, starkly outshining the Nifty 50's 15.5 per cent rise. However, amidst this bullish trend, some analysts advise caution, pointing to the steep valuations and the recent rally in the small-cap segment.
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