January 2024 witnessed a significant surge in investments within India’s mutual fund industry, continuing a remarkable streak of 35 consecutive months of positive inflows.
This trend highlights increasing investor confidence in mutual funds, reflecting a strong economy and strategic investment preferences.
Record inflows across equity and debt funds
Equity mutual funds experienced a substantial influx of investments, with January inflows reaching ₹21,780 crore, marking a notable 28% increase from December 2023.
Conversely, debt funds also saw a remarkable turnaround, attracting ₹76,469 crore in January, a significant shift from the previous month’s outflow of ₹75,560 crore. This dual surge across equity and debt funds shows the diversified investment preferences of investors.
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Sectoral trends and performance highlights
Analysing sectoral trends reveals intriguing insights into investor preferences and market dynamics. Despite a marginal decline, small-cap funds remained resilient, with ₹3,257 crore in January.
In contrast, large-cap funds observed a noteworthy turnaround, recording inflows of ₹1,287.05 crore after experiencing outflows in December. This demonstrates the adaptability of investors to capitalise on emerging opportunities across different market segments.
ETFs, NFOs, and asset growth
Exchange-traded funds (ETFs) experienced a substantial uptick in inflows, reaching ₹571 crores in January, signalling growing investor interest in this investment avenue. Moreover, New Fund Offers (NFOs) continued to attract significant attention, raising ₹6,817 crore in January, reflecting investor appetite for new investment opportunities.
| Figures in ₹ cr | January | December |
| Small Cap Fund Inflow | 3,257 | 3,857 |
| ETF Inflow | 571 | 200 |
| Liquid Fund Inflow | 49,468 | Outflow 39,675 |
The surge in Systematic Investment Plans (SIPs) to a record high of ₹18,838 crore in January contributed significantly to the industry’s asset growth, reaching ₹52.74 lakh crore.
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Performance insights and top-performing funds
Examining performance metrics within the mutual fund landscape.
| Large Cap Funds | 1-year-returns (%) |
| Nippon India Large Cap Fund (G) | 36.27 |
| Kotak Bluechip Fund (G) | 25.26 |
| Canara Rob Bluechip Equity Fund-Reg (G) | 25.95 |
| Mid Cap schemes | 1-year-returns (%) |
| Quant Mid Cap fund | 51.87 |
| Motilal Oswal MidCap Fund | 47.85 |
| Kotak Emerging Equity Fund | 35.40 |
Disclaimer: Investors are advised to evaluate their risk appetite and conduct thorough research before taking any investment decisions.
Conclusion
With 35 consecutive months of positive inflows and robust performance across various categories, mutual funds continue to be a preferred investment avenue for investors seeking long-term wealth creation.
As the industry evolves and adapts to changing market dynamics, investors can leverage diverse investment options and strategic insights to navigate the financial landscape effectively.
