Retail investors continued to allocate to their equity mutual fund portfolios using systematic investment plans (SIPs) where collections touched a new high of Rs 17,073 crore, which is Rs 145 crore higher than the previous month’s Rs 16,928 crore.
Debt funds saw outflows of Rs 4,707 crore, as some retail investors moved money to hybrid funds. Overall, the average assets under management rose to Rs 48.75 lakh crore, up from Rs 47.52 lakh crore in October.
“Diwali festivities and bank holidays affected equity net flows in November. SIPs continue to attract new investors,” said Manish Mehta, head-sales, marketing and digital business at Kotak Mutual Fund.
Small-cap and mid-cap funds continued to see high interest from investors with these categories getting the highest flows. While small-cap funds saw inflows of Rs 3,699 crore, mid-caps saw investors adding Rs 2,666 crore.
Sectoral and thematic funds also attracted investors with such schemes receiving inflows of Rs 1,965 crore. Multi-cap schemes that invest in a mix of large-, mid- and small-cap stocks saw an addition of Rs 1,713 crore, while the large and midcap category saw investors adding Rs 1,847 crore.In the debt space, investors added Rs 865 crore to money market funds and Rs 648 crore to floater funds as uncertainty on rate cuts led investors to choose these categories. Corporate bond funds and ultra-short-duration funds saw outflows of Rs 1,578 crore and Rs 1,866 crore, respectively.”Since the revision of tax laws, investments in fixed-income funds have been notably subdued. The uncertainty surrounding interest rates has further complicated investment decisions for investors. Moreover, the robust performance of equity markets has been drawing increased attention from investors,” said Himanshu Srivastava, associate director-manager research at Morningstar Investment Research.
In the hybrid space, multi-asset funds saw strong inflows of Rs 2,589 crore, followed by arbitrage funds which saw flows of Rs 9,404 crore, and equity savings funds that allocate a small component of 10-25% of their portfolios to equity saw inflows of Rs 880 crore.
Gold ETFs saw inflows of Rs 333 crore with some investors allocating to the yellow metal on hopes that there will be no more rate hikes in the US and the Fed will start cutting rates from April 2024. Fund of funds that invest overseas continued to see outflows with investors redeeming units worth Rs 286 crore.