Total assets under management (AUM) increased to Rs 82.03 lakh crore from Rs 81.01 lakh crore. Although total net inflows have declined somewhat, the overall trend of investment in equity mutual funds remains strong. Notably, the pace of investment in gold ETFs slowed significantly compared to the previous month.
Strong investment in equity mutual funds
Investor confidence in equity mutual funds remained intact in February. Total net inflows in this segment stood at around Rs 25,978 crore, up from Rs 24,029 crore in January. Equity AUM also rose to Rs 35.39 lakh crore, compared to Rs 34.87 lakh crore in January. It is clear that despite the volatility in the market, investors continued to invest in equity funds for the long term.
Rising interest in midcap and smallcap funds
Category-wise, midcap and smallcap funds witnessed strong investor interest. Midcap funds recorded inflows of around Rs 4,003 crore in February, up from Rs 3,185 crore in January.
Similarly, investments in smallcap funds also increased, rising to Rs 3,881 crore from Rs 2,942 crore in the previous month. At the same time, investor confidence in large-cap funds remained steady, with inflows of Rs 2,112 crore recorded in this category.
Gold ETFs lose some shine
While investments in equity funds increased, the pace of inflows into gold ETFs slowed noticeably. Gold ETFs recorded inflows of around Rs 5,255 crore in February, compared to approximately Rs 24,040 crore in January.
ETFs and bond funds have a mixed stance
Inflows in the ETF segment have also decreased. The ETF saw an inflow of around Rs 4,487 crore in February, compared to Rs 15,006 crore in January. Corporate bond funds saw an outflow of Rs 2,302 crore, though it was much lower than the outflow of Rs 11,473 crore in January. Credit risk funds also saw an outflow of Rs 94 crore.
Increased movement in liquid funds and thematic funds
Liquid funds saw tremendous inflows in February. The category received an investment of about Rs 59,077 crore, which is almost double the Rs 30,682 crore in January. Investment in sectoral and thematic funds also increased to Rs 2,987 crore from Rs 1,043 crore in the previous month.
Investors’ interest in the new fund offering, i.e. NFO, has also increased. Around Rs 4,979 crore was raised through NFOs in February, compared to Rs 1,939 crore in January.
