Inflows into equity mutual funds increased 3 per cent last month to ₹38,239 crore against ₹37,113 crore logged in July largely due to new fund offers and market rally. Investments in thematic funds jumped to ₹18,117 crore (₹18,386 crore) on the back of new fund offers.

The industry collected ₹10,202 crore (₹13,735 crore) through 5 thematic funds in August. In all, 18 NFOs have collected ₹13,815 crore (₹16,565 crore) last month.

Flexi- and small-cap funds attracted the highest inflow of ₹3,513 crore (₹3,053 crore) and ₹3,209 crore (₹2,109 crore). Large-caps received an inflow of ₹2,637 crore (₹670 crore). Despite the regulator SEBI’s concern, investment in small-cap and mid-cap funds were higher at ₹3,209 crore (₹2,109 crore) and ₹3,055 crore (₹1,644 crore), respectively.

Investor confidence

Venkat Chalasani, Chief Executive, AMFI, said the industry assets rising to a new high of ₹66.70 lakh crore is a reflection of investor confidence and that mutual funds are turning out to be a preferred investment avenue. The steadily increasing SIP contribution highlights the shifting investor sentiment towards disciplined and long-term wealth accumulation, he added.

Hybrid funds got an inflow of ₹10,005 crore as investors pumped in ₹3,215 crore and ₹2,826 crore in balanced advantage and multi-asset funds.

Inflows through SIP continued to hit a record high of ₹23,567 crore against ₹23,332 crore in July. SIP asset increased to ₹13.38 lakh crore (₹13.09 lakh crore).

Madhu Nair, Chief Executive Officer at Union Mutual Fund, said flows into debt funds were predominantly on the shorter end of curve, while some of the large treasuries have taken positions in Gilt and Duration products in anticipation of interest rate cut. Fund of funds seem to be evoking interest post the taxation changes with good positive flows after a long period of time, he said.

Deepak Ramaraju, Senior Fund Manager, Shriram AMC said despite stretched valuations, the inflows continues to remain stronger, especially in the thematic, mid-cap and small-caps funds. The share of net inflows to small-cap funds has doubled and flexi-cap funds saw an increase of 12 per cent, indicating stronger demand for equities as an asset class, he added.

Akhil Chaturvedi, Executive Director, Motilal Oswal AMC said given the run-up in mid and small-cap space, managing risk is paramount today and investors are balancing their asset allocation in favour of large, multi and flexi-cap funds. New themes trying to benefit from government reforms also offer opportunity to participate through tactical allocation, he added.

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