Mutual fund assets soar beyond Rs 50 lakh crore, small-caps lead inflows

Mutual fund news: The mutual fund landscape witnessed a historic milestone in December as net assets under management (AUM) crossed the Rs 50 lakh crore-mark, fueled by robust inflows, particularly in small-cap funds, according to data from the Association of Mutual Funds in India (AMFI).

The data revealed a surge in net equity mutual fund inflows, reaching Rs 16,997 crore last month, with small-cap funds leading the way, attracting Rs 3,857 crore, marking the 15th consecutive month of substantial investments in this category.

Venkat Chalasani, the chief executive of AMFI, highlighted the remarkable pace of growth, noting that while it took nearly 50 years to accumulate the first Rs 10 lakh crore in AUM, the subsequent Rs 10 lakh crore were added in just over a year. He attributed this acceleration to consistent retail participation through systematic investment planning (SIP).

In a breakdown of equity mutual fund inflows, mid-cap funds experienced a month-on-month decline, with inflows nearly halving to Rs 1,393 crore, while large-caps witnessed outflows of Rs 281 crore in December. However, small- and mid-cap indexes showed impressive gains of about 56 per cent and 47 per cent in 2023, respectively.

The sustained domestic inflows, combined with record monthly buying by foreign portfolio investors, propelled India's benchmark indices, the Nifty 50 and the Sensex, to record highs, each rising about 8 per cent in December.

Mutual fund inflows in equity-oriented schemes totaled Rs 1.62 lakh crore in 2023, contributing to the 20 per cent rise in the Sensex and Nifty and boosting small- and mid-cap segments.

Notably, systematic investment plans (SIPs) reached a new record, attracting Rs 17,610 crore in December, with the number of SIP accounts also reaching a new high of Rs 763.7 crore. The sustained momentum in mutual fund activities underscores the resilience of India's financial markets amid changing dynamics.

(With Reuters inputs.)