NEW DELHI: Inflows into equity mutual funds saw a drop of 11% in September even as thematic and sectoral funds continue to drive healthy collections. In September, net inflows into equity funds fell to Rs 34,419 crore from Rs 38,239 crore in the previous month. The drop in equity fund inflows was despite a 2% jump in the equity markets during the month.
According to experts, the drop in equity fund inflows could be owing to investors’ concern over valuation, increasing geo-political uncertainty and moderation in earnings, resulting in redemption from equity funds. Of the
Rs 34,419 crore net inflows into equity funds in September, sectoral and thematic funds accounted for Rs 13,254 crore, or 38.5% of the net inflows during the month. In August, these funds had accounted for 47% of the total inflows. Mid and small cap funds continue to remain big draws for investors as they together accounted for Rs 9,000 crore net inflows into equity funds. Of Rs 2.03 lakh crore net inflows in the current financial year (April-Sep) in equity-oriented funds, 47% or Rs 96,489 crore has come into sector/thematic funds, largely driven by launch of new funds.
Cautioning investors of pumping money in new fund offers, Abhishek Tiwari, chief business officer, PGIM India AMC, says investing in this category can be highly rewarding in the short to medium term, but it comes with relatively higher risk as one has to get the timing of entry and exit right in a sector fund, especially the ones which are narrow and dominated by a top-down view.
Meanwhile, net asset under management (AUM) of the mutual fund industry grew in September to Rs 67.09 lakh crore as on 30 September, up 4.65% month-on-month. At the end of August 2024, the net AUM was Rs 66.70 lakh crore.