Inflows into equity MFs hit a 9-month high in Feb, retail MF folios at record high

• Mutual fund folios reached an all time high in February at ₹14.43 lakh crore.
• High inflows were seen in thematic and small cap funds at ₹3,856 crore and ₹2,246 crore respectively.
• Debt oriented funds continued to witness outflows of ₹13,815 crore in February.

Inflows into equity oriented mutual funds hit a nine-month high in February with an infusion to the tune of ₹15,686 crore. The inflows stood at ₹12,546 crore in January, as per Association of Mutual Funds in India (AMFI) data.

“This was on the back of a successful NFO of a couple of sectoral funds and one multicap fund. All these three funds mobilized ₹4,300 crore in total, which led to strong inflows,” said Viraj Gandhi, CEO at SAMCO MF.

Mutual fund folios reached an all time high in February at 144 million, with MF industry assets under management (AUM) at ₹39.46 lakh crore. Retail MF folios were also at record high.

High inflows were seen in thematic and small cap funds at ₹3,856 crore and ₹2,246 crore respectively. Mutual funds’ interest in mid and small caps has been growing in the last three quarters.

Domestic institutional investors (DIIs) like mutual funds invested into equities even as foreign institutional investors (FIIs) investments fell into the red. Overall, FPIs sold equities worth ₹5,293 crore in February, while they sold equities worth ₹28,851 crore last month.

FDs vs debt oriented funds
Debt oriented funds continued to witness outflows of ₹13,815 crore in February, higher than ₹10,316 crore in January. This is because interest rate sensitive funds like credit risk funds, floater funds etc have been impacted by RBI’s rate hikes, said AMFI, CEO, NS Venkatesh in a media call.

“Rising interest rates have hurt debt fund returns over the past year, with category average returns for most fixed income funds ranging from 3-4.5%. It is possible that investors are growing wary and are choosing to move money to fixed deposits instead, considering that their interest rates have seen an impressive rise of late,” said Harsh Gahlaut, CEO at FinEdge.

SIP flows slow down marginally
Contribution of retail investors through SIPs fell to ₹13,686 crore in February from ₹13,856 crore in January.

“Retail investors continue to enter the markets via the SIP route, which is reflected in the consistent rise in SIP inflows over the last many months. Due to the fact that February has only 28 days, there is a dip seen in SIP contribution numbers as the flows are not recorded for the full month of 31 days,” Venkatesh said.

The number of SIP accounts rose to 6.28 crore in February compared to 6.21 crore last month. The total SIP assets under management stood at ₹6.74 lakh crore.


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