Net assets under management of the mutual fund industry have grown 3.41 per cent to Rs 54.54 trillion in February 2024 from Rs 52.74 trillion in January 2024 and 38.21 per cent from Rs 39.46 trillion in February 2023.
Net inflows into equity funds stood at Rs 26,865.78 crore driven largely by new fund offerings in sectoral and thematic funds which saw an inflow of Rs 11,262.72 crore.
Inflows into small-cap funds and mid-cap funds have tapered to Rs 2,922.45 crore and Rs 1,808.18 crore during the month from Rs 3,256.98 crore and Rs 2,061.18 crore, respectively, in January amid asset management companies being advised to disclose the liquidity status of stocks in the portfolio of these funds.
"February 2024 saw 22 months' highest inflow in equity-based funds. February was also the NFO festival for the industry. There were 20 NFOs," said Viraj Gandhi, CEO, Samco Mutual Fund.
"As anticipated earlier, there was a mild sequential moderation in mid-cap and small-cap fund inflows by 12 per cent and 10 per cent respectively. Even Sebi has taken a prudent step by asking all mutual funds to disclose the liquidity status of all stocks in the portfolio. Caution was required, caution is advised and caution prevailed by moderation of flows in the segment, though marginally, but a step in the right direction," Gandhi said.
Debt-oriented schemes saw net inflows of Rs 63,809 crore led by Rs 83,642 crore of inflows into liquid funds and outflows of Rs 17,376 crore from overnight funds.
"Arbitrage category AUM (classified under hybrid schemes) has scaled to nearly Rs 1.8 lakh crore which is a new high. This category has seen large net inflows every month this financial year. Arbitrage yields have been quite lucrative, attracting a lot of investor interest," said Anand Vardarajan, business head — banking, institutional clients, alternate products and product strategy, Tata Asset Management.
"The RBI has maintained status quo on its benchmark rate at 6.5 per cent during its monetary policy committee meeting in February and we expect it to maintain status quo on rates for the next one or two quarters. This will lead to some softness in yields in the near term. However, the investors will remain a little cautious ahead of the election months and will also closely watch global interest rates," said Ashwini Kumar, head — market data, Icra Analytics.
"There has been a surge in SIP (systematic investment plan) accounts, totalling 8.20 crores with 49.79 lakh new SIP registrations," said Venkat Chalasani, chief executive, AMFI.
Chalasani said that despite moderation, inflows into mid-cap and small-cap funds are expected to continue in a calibrated way. "If there are any risks, if there are any parameters that are crossing comfort zone, individual AMCs would be taking the necessary steps," he said.
