Thematic Funds Take Crown Away From Flexi-Cap, Become Largest In Equity Category

Sectoral and thematic funds have grown to become the highest actively managed equity fund in July, despite an overall dip in the category led by small- and mid-cap funds.

Total net assets under management of sectoral and thematic funds have grown to Rs 4.21 lakh crore in July from Rs 3.83 lakh crore in the previous month. The net AUM for the flexi-cap fund stood at Rs 4.20 lakh crore in July.

Equity inflows declined 8.6% to Rs 37,113.4 crore last month against Rs 40,608.2 crore in June. Net flows recorded an inflow of Rs 1.89 lakh crore against an outflow of Rs 43,636.5 crore in June, led by a jump in the fixed income funds, according to data released by the Association of Mutual Funds in India on Friday.

July was marked by a slew of proposals to tame the booming participation in equity derivatives as warnings swelled to ensure the savings of retail investors are made productive.

The Union government, in its budget on July 23, proposed to increase the short-term capital gains on listed equity shares, mutual funds that invest in equity shares, and units of business trusts to 20% from 15%. The long-term capital gains on all financial and non-financial assets will be taxed at 12.5% from the current 10%.

Small-cap funds logged inflows of Rs 2,109.20 crore during the month under review, compared to Rs 2,263.5 crore in the previous month. Mid-cap schemes attracted investments of Rs 1,644.22 crore, against Rs 2,527.84 crore in June.

Inflows into large-cap funds fell to 670.1 crore in the last month, compared with Rs 970.4 crore in June. Multi-cap funds had inflows of Rs 7,084.6 crore, against Rs 4,708.6 crore in June.

Liquid funds recorded an inflow of Rs 70,060.9 crore during the month under review, as opposed to the around Rs 80,354-crore outflow in June. Credit-risk funds saw outflows of Rs 542.8 crore in July, as opposed to Rs 478.4 crore being pulled out of the schemes in June.

Total inflow into debt-oriented funds stood at approximately Rs 1.19 lakh crore in July, against an outflow of Rs 1.07 lakh crore in the month before.

Overall inflows into mutual funds stood at Rs 1.89 lakh crore during July, compared with an outflow of Rs 43,636.5 crore. Net assets under management increased to approximately Rs 65 lakh crore in July from Rs 61.2 lakh crore in June.

Having crossed Rs 50 lakh crore in December 2023, the next Rs 10-lakh-crore journey of the net AUM to the Rs 60-lakh-crore mark has been achieved in just six months. 

Overall, the systematic investment plan continued to reach new peaks with Rs 23,322 crore of inflows in July, as against a contribution of Rs 21,262 crore in the previous month.

The net SIP inflow during May stood at Rs 9,226 crore, less than half the gross inflows. For April, the net SIP inflow stood at Rs 8,660 crore.