The mutual fund industry is within touching distance of crossing the milestone of assets under management (AUM) of Rs 50 lakh crore (trillion).

With equity markets on a roll and indices crossing record highs, retail investors are piling on to equity funds.

The mutual fund industry has clocked a net AUM of Rs 49.04 lakh crore as of November 30, 2023, up 5 per cent from Rs 46.71 lakh crore as of October 31, 2023 and 21.5 per cent from Rs 40.37 lakh crore as of November 30, 2022.

The growth in AUM was led by a positive net flow of Rs 15,536.42 crore into equity-oriented schemes, Rs 1,353.46 crore into index funds and Rs 13,538.05 crore into hybrid schemes, while debt schemes saw a net outflow of Rs 4,706.75 crore.

“Equity AUMs for domestic mutual funds (including ELSS and index funds) increased 7.8 per cent month on month to Rs 22.24 lakh crore in November 2023, fuelled by a rise in market indices (Nifty up 5.5 per cent month on month). Net inflows moderated to Rs 16,889 crore in November 2023 from Rs 22,000 crore in October 2023,” Motilal Oswal said in a research report.

The report added that there was a notable change in sector and stock allocation of funds. On a month-on-month basis, weights in healthcare, real estate, technology utilities, retail and metals increased, while that of banks, consumers, chemicals and consumer durables moderated.

“The AUM has been increasing steadily, reflecting the growing trust and confidence of investors. We believe this trend will continue through December as well and the numbers will continue to remain positive. The SIP contribution stood at an all-time high of Rs 17,073 crore in November with a total of 7,44,13,903 accounts, the highest till date,” said N.S. Venkatesh, CEO, Amfi.

“The mutual fund industry is nearing the Rs 50 lakh crore landmark highlighting the sustained trust of investors buoyed by the positive inflows into equity funds. We continue to see growing retail investor confidence and participation through SIPs which showed a smart growth in November. As mutual funds continue to be the vehicle of choice for investments, the industry is poised to help more savers become investors,” said Vishal Kapoor, CEO of Bandhan AMC.
Small cap
Within equity mutual funds, fund managers pointed out small-cap funds are continuing to draw major investor interest during November.

“Small cap funds experienced robust inflows, leading the equity mutual fund category with an impressive Rs 3,699 crore — propping the asset base to Rs 2 lakh crore," said Dhawal Ghanshyam Dhanani, fund manager of Samco Mutual Fund.

"Midcap funds followed closely with inflows amounting to Rs 2,666 crore while sector or thematic funds attracted Rs 1,965 crore. Further, despite a subdued trend in large-cap fund flows, there is a discernible preference among investors for index funds, with a significant inflow of Rs 1,353 crore in November,” he said.