NEW DELHI: Inflows into equity mutual funds saw a drop of 10 per cent 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 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 assets under management (AUM) of the mutual fund industry grew in September to Rs 67.09 lakh crore as of 30 September, up 4.65% month-on-month. At the end of August 2024, the net AUM was Rs 66.70 lakh crore.
SIP contribution stood at an all-time high of Rs 24,508.73 crore in September 2024 as against Rs 23,547.34 crore in August 2024. The SIP AUM is highest ever at Rs 13,81,703.94 crores for the month of September 2024 compared to Rs 13,38,944.73 crores for the month of August 2024
The number of SIP accounts stood at the highest ever at 9,87,44,171 in September 2024 as compared to 9,61,36,329 in August 2024.