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Below is a perspective AMFI Data  by Kislay Upadhyay, smallcase manager and Founder of FidelFolio Investments on AMFI Data.

Despite Foreign Portfolio Investors turning pessimistic towards equity for first time in months due to US yield increase and global challenges, equity remains a magnet for inflows, signalling a sustained shift in Indian investors' risk appetite. This move towards aggressive risk allocation is evident in the heavy outflow from debt funds, particularly pure debt funds, while hybrid funds experience a windfall of inflows. Investors are increasingly favouring dynamic asset allocation over traditional pure debt funds.

1. Equity Inflows despite FPI playing dampener:

* Equity continues its upward trajectory with a ?14,000 crore inflow, marking the second-highest in the last six months

* Among equity, every category witnessed inflow, except Large-cap funds

* Number of folios continues to rise for active equities, hybrid, and index funds & ETFs, indicating equity being favoured by small and large investors

* Passive funds maintain a consistent increase in their net inflow month over month

2. Continued Debt Fund Challenges indicate changing risk perspective of institutional & individual investors:

* Debt funds face a substantial outflow of ~?1 trillion, the highest in the last six months

* Total Assets Under Management (AUM) witness a significant decline for debt funds, while hybrid funds saw windfall inflow and all categories of equity funds experience growth (except large cap)

* Even in terms of number of folios, debt funds saw significant decline

3. Hybrid Funds and Dynamic Asset Allocation shine in both volume and value:

* Multi-asset allocation hybrid funds record a remarkable 16% MoM increase in number of folios, leading to a corresponding AUM surge of 19% MoM

4. Smallcap still favourite of small investors, large investors show slight risk-off:

* Small investors gravitate towards small-cap funds, evident in the highest increase in the number of folios (6% MOM). This is 4th consecutive rise of 6% in number of folios in smallcap funds Larger

* investors exhibit a risk-off approach. Though number of folios increase was highest in smallcap categories, net inflows was higher in sectoral funds alone, and multi cap & flexi cap combined

5. Bullish Fund House Perspectives on mutlicap and sectoral funds:

* All active equity categories show growth in the number of folios, with small-cap funds leading at 6%, followed by multicap (4%) and sectoral funds (3%).

* While smallcap and midcap inflows continue, they reduce compared to the previous month, with sectoral/thematic funds emerging as the largest category in terms of net inflow.

* Fund houses are most bullish on multicap, flexi, and sectoral funds, increasing the number of schemes by 3-5%.

6. SIP Momentum shows investors have learnt power of systematic investment, and seems they won’t forget anytime soon:

* The power of systematic investment plans (SIPs) remains evident, with a continued growth to ?16,402 crore, up from ?15,814 crore last month.

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