In March, actively managed equity mutual funds faced a notable outflow of ₹25,082.01 crore, marking a 14.4% decline compared to the previous month’s inflow of ₹29,303.3 crore. This data, provided by the Association of Mutual Funds in India, highlights a shift in investor sentiment. Despite the outflows, the overall assets under management (AUM) for active equity funds experienced a modest increase of 7.5%, contrasting with a 7% decline noted in February.

Overview of Mutual Fund Flows

The mutual fund industry as a whole recorded a substantial net outflow of ₹1.64 lakh crore in March, a stark contrast to the inflow of ₹40,063.3 crore seen in February. The industry’s total net AUM climbed to ₹65.74 lakh crore, up from ₹64.53 lakh crore the previous month.

Performance of Actively Managed Equity Funds

• Large-cap funds: Inflows reached ₹2,479.31 crore, a decrease from ₹2,866 crore in February.
• Mid-cap funds: The category attracted ₹3,438.87 crore, slightly more than the ₹3,406.9 crore recorded in the prior month.
• Small-cap funds: These funds saw a robust inflow of ₹4,092.12 crore, compared to ₹3,722.46 crore in February.
• Flexi-cap funds: Inflows increased to ₹5,615 crore, up from ₹5,104.2 crore the previous month.

However, inflows into sectoral and thematic funds plummeted to just ₹170.09 crore, a significant drop from the ₹5,711.5 crore seen in February.

SIP Contributions and Trends

The Systematic Investment Plan (SIP) contributions also saw a slight decrease, dropping 0.28% to ₹25,926 crore in March from ₹25,999 crore in February. Currently, the assets under management for SIPs stand at ₹13.35 lakh crore, representing 19.2% of the total industry assets, compared to ₹12.38 lakh crore the previous month.

Insights on Debt and Hybrid Funds

In the debt fund segment, March witnessed an outflow of ₹2.02 lakh crore, a stark contrast to the ₹6,525.5 crore outflow from the same month last year. Overnight funds faced significant outflows, recording ₹30,015.8 crore, compared to ₹2,263.9 crore in February. On a brighter note, liquid funds attracted an inflow of ₹1.33 lakh crore, contrasting with ₹4,976.97 crore in the previous month.

Hybrid schemes, on the other hand, experienced outflows of ₹946.56 crore, a significant drop from inflows of ₹6,803.8 crore the previous month. Multi Asset Allocation Funds led the way with inflows of ₹1,670.34 crore.

New Fund Offerings (NFOs)

March also saw new fund offerings bring in ₹4,085 crore, with four out of thirty active equity fund launches contributing to this figure. This is a slight increase compared to the ₹3,957 crore seen in the prior month. The Index Funds category led the charge with the highest number of NFO launches in March.

In summary, while actively managed equity funds are navigating a challenging landscape, the overall mutual fund industry continues to show resilience with notable AUM growth. Investors appear to be reassessing their strategies, reflecting the dynamic nature of the current market environment.