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According to Motilal Oswal Fund Folio Report, domestic MFs saw their equity AUM rise for the 11th consecutive year to INR33.4t (+40% YoY) in CY24. AUM growth was fueled by an uptrend in market indices (Nifty: +9% YoY) and higher equity scheme sales (at INR9,120b; +69% YoY). However, redemptions also rose 40% YoY to INR4,645b, leading to a rise in net inflows (more than double YoY) to INR4,475b in CY24 (all-time high) from INR2,063b in CY23. The MF industry’s total AUM increased 32% YoY (INR16.1t) to INR66.9t in CY24, propelled by the growth in equity funds (INR9,537b), liquid funds (INR1,727b), balanced funds (INR1,533b), other ETFs funds (INR1,424b), and income funds (INR954b). Investors continued to park their money in mutual funds, with inflows and contributions in systematic investment plans (SIPs) reaching a new high of INR264.6b in Dec’24 (up 4.5% MoM and 50.2% YoY).

AUM: Down 1.7% MoM to INR66.9t in Dec’24; equity inflows remain strong Trend in total AUM  

Total AUM of the MF industry declined 1.7% MoM to INR66.9t in Dec’24, primarily led by a MoM decrease in AUM of liquid funds (INR882b), income funds (INR298b), and other ETFs (INR204b). Conversely, AUM of equity funds increased INR235b MoM. Equity AUM of domestic MFs (including ELSS and index funds) increased 0.7% MoM to INR33.4t in Dec’24, led by the increase in sales of equity schemes (up 16.3% MoM to INR813b). At the same time, market indices declined (Nifty-50 down 2% MoM) and redemptions increased 19.3% MoM to INR354b. Consequently, net inflows grew 14% to INR459b in Dec’24 from INR403b in Nov’24.

Top 20 funds: Value of equity MFs flat MoM and up 36.1% YoYTotal

Total equity value of the top 20 AMCs was flat MoM (up 36.1% YoY) in Dec’24 vs. a 2% MoM decline (+8.8% YoY) for the Nifty-50. Among the Top 10 funds, the MoM increase was seen in DSP Mutual Fund (+0.7%), Axis Mutual Fund (+0.5%), and ICICI Prudential Mutual Fund (+0.3%).

 Sector-wise weightage: MoM increase seen in Healthcare, Retail, and Cons. Durables

 In Dec’24, MFs showed interest in Healthcare, Retail, Consumer Durables, Technology, and Real Estate, leading to a MoM rise in their weights. Conversely, Private Banks, Capital Goods, Utilities, Automobiles, Consumer, Oil & Gas, NBFCs, PSU Banks, Metals, Chemicals, Insurance, and Media saw a MoM moderation in weights. Private Banks (16.6%) was the top sector holding for MFs in Dec’24, followed by Technology (9.4%), Automobiles (8.2%), and Capital Goods (7.8%).  Consumer Durables, Retail, Real Estate, Healthcare, and Textiles witnessed the maximum increase in value MoM.

Sectoral allocation of funds: Consumer, Oil & Gas, and Private Banks under-owned 

The top sectors where MF ownership vs. the BSE 200 is at least 1% lower: Consumer (17 funds under-owned), Oil & Gas (17 funds under-owned), Private Banks (16 funds under-owned), Technology (15 funds under-owned), and Utilities (13 funds under-owned).

The top sectors where MF ownership vs. the BSE 200 is at least 1% higher: Healthcare (16 funds over-owned), Capital Goods (13 funds over-owned), Consumer Durables (10 funds over-owned), Chemicals (9 funds over-owned), and Retail (8 funds over-owned).

Nifty-50 snapshot: MFs net buyers in 56% of stocks

The highest MoM net buying in Dec’24 was seen in Cipla (+10.6%), SBI Life Ins. (+7.1%), Indusind Bank (+5.7%), Hero Motocorp (+5.6%), and Trent (+4.5%).

Nifty Midcap-100 snapshot: MFs net buyers in 60% of stocks

The highest MoM net buying in Dec’24 was observed in Yes Bank, HUDCO, Tata Elxsi, Godrej Properties, and Indian Renewable Energy.

 Nifty Smallcap-100 snapshot: MFs net buyers in 53% of stocks

The highest MoM net buying in Dec’24 was witnessed in Signature Global, Mahanagar Gas, CPCL, Narayana Hrudayalaya, and J&K Bank.

Top schemes and NAV change: 76% of the top 25 schemes close lower MoM

Among the top 25 schemes by AUM, the following posted the highest MoM decline: HDFC Large Cap Fund (-2% MoM change in NAV), ICICI Pru Bluechip Fund (-2% MoM), ICICI Pru Value Discovery Fund (-2% MoM), SBI Bluechip Fund (-1.8% MoM), and Mirae Asset Large Cap Fund (-1.8% MoM).

Value surprise: Maximum MoM decline seen in banking stocks

In Dec’24, the stocks that saw the maximum MoM increase in value were Sun Pharma, Cipla, Trent, Torrent Power, Lupin, Coforge, PG Electroplast, Zomato, Infosys, and Dixon Technologies.

Conversely, the stocks that witnessed the maximum MoM decline in value were HDFC Bank, NTPC, Reliance Industries, ICICI Bank, SBI, L&T, TCS, Coal India, Axis Bank, and HUL.

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