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Below the Quote On October Sees Record Inflows in Equity Mutual Funds, Debt Funds, and SIP Contributions By Rishabh Goel, MD, Tailwind Financial Services

October was a remarkable month for the Indian mutual fund industry, which witnessed record inflows in equity mutual funds, strong SIP growth, and a significant boost in debt fund investments. According to data from the Association of Mutual Funds in India (AMFI), overall mutual fund inflows reflected robust investor confidence across various fund categories, from equity to hybrid and passive funds.

Equity Mutual Fund Inflows Hit New Highs

Equity mutual funds saw a 21.69% increase in inflows month-on-month, reaching Rs.41,887 crore, showcasing continued demand across all major categories:

* Large-cap funds recorded an inflow surge to Rs.3,452 crore, nearly double from the previous month.

* Mid-cap funds saw a 50% increase, totaling Rs.4,683 crore.

* Small-cap funds posted a 23% increase in inflows, attracting Rs.3,772 crore.

* The industry’s total assets under management (AUM) edged up to Rs.67.25 lakh crore in October, from Rs.67.09 lakh crore in September.

Debt Funds Witness Significant Inflows

Debt funds made a strong comeback in October, recording an inflow of Rs.1.57 lakh crore, reversing a substantial outflow of Rs.1.14 lakh crore in September. Within the debt fund category:

* Liquid funds attracted an impressive Rs.83,863 crore in inflows.

* Overnight funds received Rs.25,784 crore, reinforcing investor interest in short-term debt options.

Hybrid and Passive Fund Categories Show Strong Growth

Hybrid schemes experienced substantial growth, with inflows of Rs.16,863 crore in October, up from Rs.4,901 crore in September. Arbitrage funds accounted for the highest inflows within the hybrid category, while multi-asset allocation funds were the top performers in the previous month.

Passive funds also saw a surge, with inflows reaching Rs.23,428 crore in October, a significant increase from Rs.3,254 crore the prior month. The Other ETFs segment led the category, drawing Rs.13,441 crore in inflows.

SIP Contributions Reach Record Levels

Systematic Investment Plans (SIPs) continued their upward trajectory, with SIP contributions hitting an all-time high of Rs.25,322.74 crore in October, up from Rs.24,508.73 crore in September. SIPs now contribute approximately 20% to the industry’s total assets under management. In addition to record contributions, the SIP asset under management (AUM) also reached a new peak of Rs.13,30,429.83 crore. The number of active SIP accounts increased to 10,12,34,212, underscoring the popularity of SIPs as a disciplined investment option.

Inflows in New Fund Offers (NFOs) Decline

Inflows into New Fund Offers (NFOs) dropped significantly, totaling Rs.6,078 crore in October compared to Rs.14,575 crore in September. The Index Funds category saw the most NFO launches.

Investor Sentiment and Market Outlook

The steady inflows in October reflect rising investor optimism. The monthly data reveals strong investor participation across categories, bolstered by SIPs, debt funds, and equity funds. This consistent inflow across asset classes highlights the Indian mutual fund industry's growth momentum, as it continues to attract retail and institutional investors alike.

Tailwind Financial Services remains positive about the Indian market’s potential. We believe the Indian economy is poised for a strong growth, and despite short-term market fluctuationsIndia's equity market is expected to deliver good returns over the next few years., we advise investors to continue investing in equity mutual funds for strong wealth creation with a long horizon.

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