Strategy : India MF Monthly Flow Tracker – Mar`25 JM Financial Services
In Mar'25, equity mutual funds (ex- arbitrage) saw inflows of INR 272bn (USD 3.2bn), 17% lower MoM; marking a third consecutive month of decline in inflows (4% in Jan'25, 26% in Feb'25). Thematic inflows dipped 97% MoM (after having dipped 37% MoM in Feb’25 and 41% in Jan'25). Outstanding SIP accounts in the country declined by 1.1mn lower MoM, while number of new SIPs registered (gross) declined by 0.5 mn from 4.5mn in Feb’25 to 4.0mn in Mar’25. Further, closure of SIP accounts stood at 5.2mn, taking the ratio of discontinued SIPs as a % of new SIPs to 128% vs. 123% MoM. Vis-à-vis the BSE 200, the top-5 sectors wherein domestic mutual funds remain overweight (no change vs. Jan’25) include: (1) pharmaceuticals & healthcare, (2) capital goods, (3) consumer durables, (4) agrochemicals & petrochemicals and (5) e-commerce. Vis-à-vis the BSE 200, the top-5 sectors wherein domestic mutual funds remain underweight include: (1) private banks, (2) IT services, (3) oil & gas, (4) consumer and (5) metals & mining.
* Weak market sentiment drives a 17% MoM decline in MF flows: In Mar'25, equity mutual funds (ex- arbitrage) saw inflows of INR 272bn (USD 3.2bn), 17% lower MoM; marking a third consecutive month of decline in inflows (4% in Jan'25, 26% in Feb'25). Arbitrage funds saw outflows of INR 28.5bn vs. inflows of INR 36bn in Feb'25. Core equity funds saw an inflow of INR 250bn, -14% MoM. Inflows in sectoral and thematic funds have been volatile, playing a key role in overall flows. Flows in these funds, seem to be highly correlated with market sentiments. Inflows in thematic funds dipped 97% MoM (after having dipped 37% MoM in Feb'25 and 41% MoM in Jan'25) to INR 1.7bn in Mar'25 vs. INR 57 bn in Feb'25. Interestingly, flows in thematic funds have come off significantly in almost each passing month since the top of the markets in Aug/Sep'24. Equity NFOs remained weak in Mar'25 at INR 10bn vs. INR 29bn in Feb'25.
* SIP inflows decline marginally and SIP accounts continue to see net closures: SIP inflows in Mar’25 declined marginally over Feb’25 to INR 259bn (USD 3.1bn), taking total SIP AUM to INR 13.4trln (USD 157bn), 8% higher MoM helped by +6% MoM movement in the market. Outstanding SIP accounts in the country currently stand at 100.5mn, 1.1mn lower MoM. The number of new SIPs registered (gross) also declined by 0.5mn from 4.5mn in Feb’25 to 4.0mn in Mar’25. Closure of SIP accounts stood at 5.2mn, taking the ratio of discontinued SIPs as a % of new SIPs to 128% vs. 123% MoM.
* How MF holdings stack up vs. the BSE 200: Vis-à-vis the BSE 200, the top-5 sectors wherein domestic mutual funds remain overweight include: (1) pharmaceuticals & healthcare, (2) capital goods, (3) consumer durables, (4) agrochemicals & petrochemicals and (5) textiles. Besides this, sectors such as building materials, media, and sugar have seen mutual funds taking exposure, although they do not have any weight in the BSE 200. Vis-à-vis the BSE 200, the top-5 sectors wherein domestic mutual funds remain underweight include: (1) private banks, (2) IT services, (3) oil & gas, (4) consumer and (5) metals & mining. This list remains unchanged vs. the previous month.
* Indian MF cash levels: Indian MFs cash levels stood at INR 2,059bn, which is 5.5% of total equity AUM.
* In Mar’25, equity mutual funds (ex- arbitrage) saw inflows of INR 272bn (USD 3.2bn), 17% lower MoM; marking a third consecutive month of decline in inflows (4% in Jan’25, 26% in Feb’25). Arbitrage funds saw outflows of INR 28.5bn v/s inflows of INR 36bn seen in Feb’25.
* Core equity funds saw an inflow of INR 250bn, down 14% MoM. In FY25, Indian mutual funds have seen core equity inflows of INR 4.1trln (USD 49bn).
* Inflows in sectoral and thematic funds have been highly volatile, often playing a key role in overall flows. Flows in these funds, seem to be highly correlated with market sentiments. Inflows in thematic funds dipped 97% MoM (after having dipped 37% MoM in Feb’25 and 41% MoM in Jan’25) to INR 1.7bn in Mar’25 vs. INR 57 bn in Feb’25.
* Interestingly, flows in thematic funds have come off significantly in almost each passing month since the top of the markets in Aug/Sep’24. Monthly flows in thematic funds stood at INR 181bn in Aug’24, and INR 1.7bn in Mar’25.
* Equity NFOs remained weak in Mar’25 at INR 10bn vs. INR 29bn in Feb’25.
Please refer disclaimer at https://www.jmfl.com/disclaimer
SEBI Registration Number is INM000010361
