Investors preferred debt and hybrid funds in Jan’25, visible by the net positive flows in these categories to the tune of 1.3 Lac crores and 0.17 Lac crores respectively
Jatinder Pal Singh, CEO, ITI Mutual Fund
Manish Mehta, National Head - Sales, Marketing & Digital Business, Kotak Mahindra AMC
Sanjay Agarwal, Senior Director, CareEdge Ratings
FinTech BizNews Service
Mumbai, February 15, 2025: Association of Mutual Funds in India (AMFI) has recently released MF industry’s Monthly Data for January 2025. Let’s know the perspectives of different industry voices on the January 2025 AMFI numbers.
Jatinder Pal Singh, CEO, ITI Mutual Fund
“In January 2025, volatility in the Indian equity markets, combined with geopolitical uncertainties and anticipation of the Union Budget, led to a decline in equity mutual fund AUM. This resulted in a reduction of Rs. 1.1 lakh crore in the AUM of open-ended equity mutual funds but the flows were consistent with December 2024. Investors showed a preference for Large Cap and Flexi Cap funds. Additionally, investors turned to ELSS funds to take advantage of the tax-saving benefits, reflected in a 14% rise in gross flows into these funds. Investors preferred debt and hybrid funds in Jan’25, visible by the net positive flows in these categories to the tune of 1.3 Lac crores and 0.17 Lac crores respectively.”
Sanjay Agarwal, Senior Director, CareEdge Ratings
‘’The mutual fund industry’s assets under management increased by 0.5% m-o-m to Rs.67.25 lakh crore buoyed by continued inflows of Rs 1.87 lakh crore in debt as well equity mutual funds. These inflows have persisted despite market volatility due to various macroeconomic factors, and geopolitical events. The growth in debt funds net inflows of Rs 1.29 lakh crore was at the shorter end of the curve as inflows were primarily in the overnight, ultra short duration, low duration and money market funds along with liquid funds which offset the outflows in debt funds with a maturity of over one year. January 2025 fund flows indicate a preference among investors for liquidity and flexibility over long-duration allocations, as they await clearer signals on interest rate movements before committing to long-term debt. The rebound in short-term categories highlights confidence in corporate liquidity cycles, while broader market sentiment remains cautious, reflecting ongoing concerns about macroeconomic conditions and development in interest rate & liquidity policies.
Despite market volatility, equity net inflows have remained positive for the last 47 months, driven by investor confidence, witnessing Rs 0.40 lakh crore net inflows in January 2025 with all equity categories registering net inflows in the month. However, equity inflows declined 5% sequentially coming off record highs in October 2024 and AUM declined to Rs.29.47 lakh crore due to decrease in underlying asset prices. During January 2025, 12 open-ended NFOs were floated which collectively mobilised Rs.0.05 lakh crore with sectoral/thematic funds accounting for 62% share.’’
Juzer Gabajiwala, Director and Company Secretary, Ventura Securities
“Sectoral and thematic still continue to attract the maximum flows followed by smallcap indicating a rise in the risk appetite of investors. As regards debt funds are concerned we have now seen a net investment compared to an outflow last month. However, funds have been deployed in liquid and overnight funds and not in duration or long term indicating that the rate cut was already priced in and investors are parking funds in the shorter maturity profiles.”
Manish Mehta, National Head - Sales, Marketing & Digital Business, Kotak Mahindra AMC:
January numbers came in tad lower than December. Investor participation across various categories of schemes continue especially large cap oriented schemes. Increasing awareness of mutual funds and it being an efficient route for long term wealth creation is demonstrated by investor behavior who seem to be adding to investments through the SIP/STP route.
