Retail inflows into equity schemes rise 42% to Rs 19,932 crore in October

• Small cap funds continue to be the preferred investment option for investors as the month saw inflows as the category has received an inflow of Rs 4,495.13 crore in October.
• The mutual fund industry had four crore unique investors in September, which is the highest seen so far and SIP (systematic investment plan) accounts stood at 7.13 crore.
• Retail investors have played a significant role in supporting markets, with inflows touching Rs 108,517 crore being pumped into equity oriented schemes in the first nine months of the year.

Retail investors continue to be bullish on equities, going by the data released by the Association of Mutual Funds of India (AMFI). Inj October, retail investors pumped in Rs 19,932 crore into equity-oriented schemes, clocking a 44% month-on-month increase in flows from Rs 14,091 crore. Small cap funds continue to be the preferred investment option for investors as the month saw inflows as the category has received an inflow of Rs 4,495.13 crore in October, compared to an inflow of Rs 2,678.47 crore in September.

Sectoral funds saw the second largest inflows during the month at Rs 3,895.72 crore. The mutual fund industry had four crore unique investors in September, which is the highest seen so far and SIP (systematic investment plan) accounts stood at 7.13 crore. The industry’s assets under management stands at Rs 47.8 lakh crore. Inflows into long term debt funds remained negligible.

Capital inflows into equity oriented schemes in calendar year 2023 have shown a positive trend, despite foreign investors turning cautious on India. Retail investors have played a significant role in driving these inflows, with Rs 108,517 crore being pumped into equity oriented schemes in the first nine months of the year.

According to data from the Association of Mutual Funds in India (AMFI), equity mutual fund inflows stood at Rs 14,091.26 crore in September. This was a decrease from the August inflows of Rs 20,245.26 crore. The demand for small-cap and sectoral funds was the primary driver behind the higher inflows in August.


Data source: AMFI

In August, net inflows into equity oriented mutual funds more than doubled to Rs 20,245.26 crore, compared to Rs 7,625.95 crore in July. The total number of systematic investment plans (SIPs) accounts stood at 6.96 crore. Most equity funds experienced fresh inflows, except for large cap funds and ELSS funds. On the other hand, debt funds continued to see outflows of Rs 25,872 crore, primarily driven by liquid funds.

AMFI's CEO, NS Venkatesh, expressed optimism about the future, stating that they believe economic growth and corporate earnings will improve, leading to continued inflows into equity funds. The number of new SIP accounts opened in 2023 has reached a record high of over 35 lakh.

Thematic and sectoral funds received the highest inflows at Rs 4,805.81 crore, followed by small cap funds with inflows of Rs 4,264.82 crore. Large cap funds, however, experienced outflows of Rs 348.98 crore in August, indicating a disenchantment among investors. Money market funds saw the lowest inflows, possibly due to reduced interest in debt funds after the withdrawal of indexation benefits by the government earlier in the year.

After a period of moderating net inflows and profit booking by investors, the tide turned in August 2023. Inflows surpassed the March figure of Rs 16,693 crore, indicating renewed investor interest. While redemptions were observed since March, flows through SIPs remained robust. In July, net inflows into equity schemes stood at Rs 7,625.95 crore, and in June, it was Rs 8,637 crore. The SIP route continued to attract strong inflows, with Rs 15,243 crore in July compared to Rs 14,734 crore in June.

Overall, the capital inflows into equity oriented schemes in calendar year 2023 have shown resilience, driven by retail investors and their confidence in the future prospects of the Indian economy.

Association of Mutual Funds in India (AMFI) recent data showed that equity mutual fund inflows slipped month-on-month and was at Rs 14,091.26 crore in September 2023. The inflows recorded in August were at Rs 20,245.26 crore, which was 30 per cent more than in September, mostly due to heavy demand in small-cap and sectoral funds.

Net inflows into equity oriented mutual funds for the month more than doubled to Rs 20,245.26 crore in the month of August against Rs 7625.95 crore recorded in the month of July. The total number of systematic investment plans accounts stood at 6.96 crore. Most equity funds saw fresh inflows barring the large cap funds and ELSS funds. The debt funds category continued to see outflows of Rs 25,872 crore, largely driven by the outflows from liquid funds. According to CEO of AMFI, NS Venkatesh, “We believe that economic growth will be higher and corporate earnings will be better so we feel equity fund flows will continue.” New SIP accounts opened are more than 35 lakh, which is a record.

The highest inflows were into thematic and sectoral funds at Rs 4805.81 crore. The small cap funds too saw inflows of Rs 4264.82 crore like it did in the previous month. Investors seem to be disenchanted with the large cap funds because the category saw outflows of Rs 348.98 crore in August. Money market funds saw the lowest inflows during the month, as investors seem to have lost the appetite for debt funds after the indexation benefits have been withdrawn by the government earlier this year.

Net inflows into equity schemes had been moderating for the last few months, with investors booking profirs. The tide has decisively turned in the month of August, which even saw inflows surpassing March inflows of Rs 16,693 crore. Since March, investors have been booking profits through redemptions, while the flows through the systematic investment plans (SIPs) remained robust. In July, net inflows into equity schemes stood at Rs 7625.95 crore while in June the same was Rs 8637 crore. Inflows through the SIP route remained strong during the month of July 2023 at Rs 15,243 crore against Rs 14,734 crore in June 2023.