IGI Logo

Perspective On AMFI Data Kislay Upadhyay, smallcase manager and Founder of FidelFolio Investments

Investor Optimism Across Diverse Categories: Positive outlook of Indian economy by rating agencies due to inflation containment and stable interest rates in recent times has enhanced the confidence of investors, who seemed a bit reluctant earlier. Despite the outflow of FPI in July, sustainability of the stock market also indicates the strength of domestic investors and their maturity.

Overall, the market scenario appears to be bullish with ongoing momentum.

* Equity markets continued their upward journey, driving a 5% month-on-month growth in total equity AUM for the third consecutive time. This surge can be attributed to both a bullish market sentiment and robust total inflows. A sustained uptrend in net AUM has been witnessed across all segments over the past four months.

* Net equity inflows have maintained their positive trajectory throughout the fiscal year 2024. Nevertheless, there has been a month-on-month reduction in net equity inflows, declining from ?8,637 crore to ?7,626 crore, reflecting a 12% drop.

* In the debt category, a remarkable turnaround occurred, transitioning from a ?14,000 crore outflow in June 2023 to a positive net inflow. This shift correspondingly boosted the net AUM by 5% month-on-month, with total inflows surpassing both equity and hybrid funds.

*The equity segment witnessed a consistent increase in the number of folios, hitting an all-time high of 10.25 crore, reflecting a noteworthy 4% growth over three months.

* Systematic Investment Plan (SIP) inflows reached an unprecedented peak at ?15,200 crore, attesting to sustained investor confidence.

Smallcap and Multicap Funds Shine, While Large Cap Faces Challenges

* Multicap and smallcap funds have emerged as the top performers, displaying a remarkable growth rate of 8% each. These funds have consistently demonstrated expansion over the last three months in terms of folio counts, net inflows, and total AUM.

* Continuing their momentum, smallcap and multicap funds have once again attracted positive net inflows. Impressively, smallcap funds alone contributed to over 50% of the total net equity inflows. The combined strength of smallcap and multicap funds accounted for a substantial 85% of the overall equity inflow.

* In contrast, largecap and focused funds have encountered consistent outflows for four consecutive months, making them the only two categories experiencing such challenges.

* Folio numbers reflect this trend, with smallcap and midcap funds maintaining steady growth over the last three months. Notably, smallcap folios experienced the highest growth, expanding by 4%, 6%, and 6% in this period. Multicap funds also exhibited commendable growth.

* In contrast, large cap funds failed to register any growth in folio counts. Remarkably, smallcap folios, totaling 1.3 crore, have now exceeded largecap folios at 1.29 crore. Notably, they even surpass folios of multi, large, mid, and large & mid-cap funds.

Passive Investment: Growth Trends Exhibit Moderation

* Notably, the contribution of Index Funds and ETFs to the total equity AUM has undergone a gradual decline, sliding from 30% in April to 28% in July 2023.

* Among passive investment avenues, Index Funds have taken the spotlight, registering the highest-ever positive net inflow in a span of four months.

* Index funds, in particular, have showcased robust growth rates of 6%, 6%, and 7% over last 3 months, contrasting with the more modest growth of 0%, 0%, and 1% observed in ETF folios.

Above views are of the author and not of the website kindly read disclaimer