Small-cap funds accounted for most of the investments among equity-oriented schemes in terms of market capitalisation, although they moderated to Rs 2,922 crore last month from Rs 3,257 crore in January.
Inflows into equity mutual funds hit the highest in nearly two years in February, with small-caps leading the charge despite valuation concerns, data from AMFI said on Friday.
Net equity mutual fund inflows rose 23.34 per cent sequentially to Rs 26,866 crore ($3.25 billion), the highest since March 2022.
Domestic equity mutual funds have seen net inflows for three years in a row, aggregating Rs 4.82 trillion, well above the net foreign inflows of Rs 17,778 crore.
The benchmark NSE Nifty 50 has risen 54.68 per cent over the last 36 months, aided by mutual fund inflows. Contributions into systematic investment plans (SIPs) hit a new record of Rs 19,186 crore in February.
“As we delve into the February data, we observe that there is a surge in SIP accounts, totalling 8.20 crores with 49.79 lakhs new SIP registrations. This underscores investors’ unwavering commitment to disciplined wealth accumulation. The industry’s net AUM has also reached ₹ 54,54,214.13 crores in February 2024,” Venkat Chalasani, Chief Executive, AMFI, said.
“Mutual funds are subject to the vagaries of the markets, and it is the industry’s virtue to guide and safeguard the investments in the best possible way to eventually help the investor. These trends not only showcase that investors are evolving to being financially savvy but also highlight collaborative efforts shaping a landscape where smart investment practices are valued. With widespread participation from retail investors nationwide, it’s clear that the mutual fund industry is on a path of steady growth and lasting significance.”
Small-cap funds accounted for most of the investments among equity-oriented schemes in terms of market capitalisation, although they moderated to Rs 2,922 crore last month from Rs 3,257 crore in January.
Inflows in mid-caps shed 12.28 per cent sequentially to Rs 1,808 crore.
Large-cap equity mutual funds saw net inflows for the second straight month.
Small- and mid-caps stocks fell 0.31 per cent and 0.48 per cent, respectively, in February, compared to a 1.18 per cent gain in the Nifty 50. Their underperformance has extended into March so far.
“We have sought measures to strengthen risk management and enhance disclosures given to investors,” Chalasani said.
Last month, AMFI asked asset management companies to ensure appropriate policies to manage risks and protect investors following the surge in the small- and mid-cap segments.
AMFI will share the first set of disclosures on March 15, Chalasani added.
