This could be a year where hybrid products gain prominence, as asset allocation becomes increasingly important
FinTech BizNews Service
Mumbai, January 9, 2025: Association of Mutual Funds in India (AMFI) has on Thursday released Mutual Fund Industry Monthly Data for December 2024. A number of leading voices of the MF industry provide analytical insights on the latest AMFI numbers:
Suranjana Borthakur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India) on AMFI:
"Despite market volatility, SIP numbers have remained strong, reflecting retail investor confidence in long-term investments in India. The near 50% growth in SIPs over the past year is a testament to the strong conviction of investors. We've also seen significant interest in sectoral and thematic funds, with mid- and small-cap segments attracting robust flows. Looking ahead, we believe a balanced allocation of large, mid, and small caps is essential for wealth generation, and investors should focus on forward-looking returns rather than historical performance.
This could be a year where hybrid products gain prominence, as asset allocation becomes increasingly important. The debt side of hybrid funds, coupled with commodities like gold, could generate solid returns amid global volatility. While thematic funds work well in satellite portfolios, it's crucial for investors to avoid overexposure to any one sector and instead seek diversified opportunities that align with long-term trends in India, such as consumption, banking, financials, and healthcare."
Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC:
In December, the Indian mutual fund industry witnessed strong demand for equity funds, particularly small-cap and sectoral/thematic funds, while overall open-ended mutual funds faced net outflows. The fixed-income and debt segments experienced significant outflows, reflecting a broader shift in investor sentiment. Despite this, the industry’s assets under management remained substantial, indicating resilience. The equity segment was further buoyed by inflows from new fund offers, with passive funds leading the charge. Additionally, small-cap funds saw a notable uptick in demand, although other categories like multi-cap, large-cap, and large & mid-cap funds experienced a decline in investor interest.”
Sanjay Agarwal, Senior Director, CareEdge Ratings: ‘‘The Mutual Fund Industry’s AuM witnessed a reduction to Rs.66.93 lakh crore in December 2024 by 1.7% m-o-m, snapping a rising streak which had begun in April. The reduction can be attributed to the expected outflows in debt mutual funds of Rs.1.27 lakh crore. Liquid funds and money market fund outflows at nearly Rs.0.92 lakh crore accounted for the bulk of the same. These are typical quarterly redemption patterns of liquidity management and various corporates requirements. Meanwhile, equity funds have continued to record inflows for 44th consecutive month with all categories witnessing inflows. Thematic funds witnessed an increase in inflows from previous month, which accounted for 37% of the equity monthly inflows reflecting investors’ confidence for thematic opportunities and their aggressive positioning. Additionally, 33 open-ended NFOs were floated in December 2024, which mobilised Rs.0.14 lakh crore with sectoral/thematic funds accounting at Rs.0.11 lakh crore or a share of 83%.’’.
Manish Mehta, National Head - Sales, Marketing & Digital Business, Kotak Mahindra AMC:
Industry number came is about 6000 crores higher than previous month. Culmination of NFOs, SIPs and lumpsum purchase led to an increase net sales numbers. Investor confidence on mutual funds are an efficient tool for investments continue to remain strong. Increasing product suite is facilitating investors to take an investment call basis their risk profile.”
Sanjay Bembalkar, Head - Equity at Union Asset Management Company
“Mutual Fund AUM flow momentum has continued to be quite active & strong. Notably, all the equity-oriented categories have seen positive flows for the month which underscores maturity of Indian investors and behaviour change considering backdrop of market volatility and economic slowdown. Mid-cap and small cap category combined has seen inflows of Rs.9,761 crores, which are at new monthly high since April 2019. Trajectory of gross SIP flows is quite encouraging at Rs.26,459 crores, which is up 50.2% yoy. These numbers indicate structural change in investing culture, thought process maturity and awareness among investors.”
Jatinder Pal Singh, CEO, ITI Mutual Fund:
“Despite muted equity market performance during the month of December 2024, inflows in open ended equity funds stayed in the positive zone for the 46th month in a row. Gross Inflows into active equity schemes was up 17% in Dec 2024 vs Nov 2024 (month on month) crossing Rs. 72,000 crores while net flows were recorded at Rs. 41,156 crores. This increase can be attributed to the 70% absolute growth in gross inflows into sectoral / thematic equity schemes (Rs. 22,128 crores in Dec 2024 vs Rs. 13,133 crores in Nov 2024), most of which can be attributed to NFOs (12 sectoral / thematic fund NFOs). Inflows in the large cap category were down by 8% month on month while net flows were down 21% compared to Nov 2024.
Meanwhile, debt mutual funds saw net outflows of Rs 1,27,153 crores during the month with Liquid, money market and overnight categories witnessing major outflows, mostly due to the quarter end phenomena. Hybrid funds saw 3 NFOs and largely remained flat in terms of AUM as of Dec 2024 at 8.76 Lac crores. The month also saw 12 Index funds and 2 ETFs being launched which took the AUM of the open-ended other schemes at Rs 11.11 Lac crores.”
