Equity fund inflows slip but remain healthy in September; mid and small cap funds outperform

• ELSS funds saw a net outflow of ₹141 crore, as compared to an outflow of ₹27 crore in August.
• Inflows in mid-cap funds held strong with a net inflow at ₹2,001 crore.
• The total AUM for September is only marginally down MoM at ₹46.58 lakh crore.

Mutual fund data for the month of September, released by the Association of Mutual Funds in India (AMFI), shows that equity fund inflows have slipped when compared to the previous month. However, inflows into midcaps and small cap funds outperformed largecap funds as has reflected in the index movements of the past month.

In September, equity mutual funds recorded net inflows of ₹13,857 crore versus ₹20,161 crore in August. A detailed look shows that inflows in mid-cap funds held strong with a net inflow at ₹2,001 crore, slightly lower than ₹2,512 crore in August.

Meanwhile, equity linked savings scheme (ELSS) funds saw a net outflow of ₹141 crore, as compared to an outflow of ₹27 crore in August. Large cap funds saw an outflow of ₹111 crore.

The total assets under management (AUM) for September is only marginally down MoM at ₹46.58 lakh crore versus ₹46.63 lakh crore in August.

Debt funds saw major outflows amounting to ₹1.01 lakh crore in September, about four times in outflows of ₹25,872 crore in August, continuing a trend. This was again driven by an outflow in liquid funds which witnessed a net outflow of ₹74,177 crore in September as compared to ₹26,824 crore in August.

According to AMFI data, in August, net investments in equity-oriented mutual funds were at ₹20,245.26 crore, almost thrice July's ₹7,625.95 crore. The total systematic investment plan (SIP) accounts reached 6.96 crore. Most equity funds saw increased investments, except for large cap and ELSS funds.

The highest inflows were in thematic and sectoral funds, at ₹4,805.81 crore, and small cap funds attracted ₹4,264.82 crore. Large cap funds faced outflows of ₹348.98 crore in August, while money market funds received the least attention as investors shied away from debt funds after the government removed indexation benefits earlier this year.

Net inflows into equity schemes had been declining for several months as investors cashed in their profits. However, August marked a significant turnaround, with inflows surpassing those in March, which stood at ₹16,693 crore.