Equity and Debt Mutual Funds Experience Significant Decline
Mutual fund investment declined in different categories in India during November. Total inflows declined significantly by about 75% to Rs 60,363 crore, compared to the monthly figure of Rs 2.39 lakh crore in October. Such a steep fall reflects changes in investors’ attitudes and market characteristics of equity and debt funds.
Equity mutual funds saw a net inflow of Rs 35,943 crore in November, down 14% from October’s Rs 41,886 crore. However, ELSS and focused funds did not demonstrate susceptibility to the downturn. Inflows to ELSS funds rose by 61%, garnering Rs. 618 crore, and small-cap mutual funds increased by 9%.
Debt Funds Face Steep Reductions
The situation was even worse, especially in the debt fund segment, which experienced a decline of inflows by about 92%. These funds collected Rs 12,915 crore in November, a rather low number compared to Rs 1.57 lakh crore collected in the previous month. As per the categories of debt funds, low-duration debt funds received the maximum inflow of Rs 4,374 cr, while ultra-short-duration debt funds received Rs 2,961 crore. However, liquid funds saw the biggest net outflow of Rs 1,778 crore in November after getting an inflow of Rs 83,863 crore in October.
Hybrid and Other Funds Also Decline
Nevertheless, flows into hybrid mutual funds declined, as the overall flow fell 76% to Rs4,123 crore in November from Rs16,863 crore in October. Among these, multi-asset allocation and dynamic asset allocation/balanced advantage funds had assets increase but at a slower pace than the previous month.
The net flow into index funds and ETFs also declined significantly. Index funds posted Rs 4,342 crore that is down 45 % from October registering inflows. Likewise, Gold ETFs and other ETFs shrunk by 35.9% and by substantial degrees respectively. Total assets under management (AUM) of the mutual fund industry increased by 1%, and reached as high as Rs 67,81,317 crore as of November 30, 2024.
However, there was a consistent trend in Systematic Investment Plan (SIP) contribution which showed retail investors’ penchant for the approach. SIP inflows in November stood at Rs 25,319.66 crore, almost the same level witnessed in October when it touched Rs 25,323 crore. These Antony indicate that there has been a steady investor investment on mutual funds through SIPs even in the face of such fluctuations.
