Mutual fund flows taper in November 2024, but SIPs remain robust

12 Dec 2024 , 11:21 AM

NOV-24 AUM GROWS MARGINALLY AS FLOWS TAPER

The overall inflows in November 2024 were sharply lower compared to October. Compared to the whopping ₹2.39 Trillion of inflows in October, November 2024 saw modest MF inflows of just about ₹60,295 Crore. With FPI buying reviving in the second half of November, domestic institutions opted to go slow on Indian equities. After setting a record in October, the equity flows also fell by over 14% in November to just about ₹35,944 Crore. There was a small shift in nature of the flows into equity funds. The frenetic flows into sectoral and thematic fund slowed, while flows into mid-cap and small cap funds remained robust, giving indications of alpha hunting. The flows into hybrid funds and passive funds were also relatively tepid in November, compared to October 2024. Debt funds saw net inflows of ₹12,916 Crore, but that was less than a tenth of the previous month.

STORY OF SIPS AND NFOS IN NOVEMBER 2024

There are some interesting observations about SIPs in November. For the second month in a row, the gross SIP flows stayed above the ₹25,000 Crore mark. However, the month of November 2024 also saw the SIP flows falling sequentially, for the first time since June 2023. However, the fall was marginally in the sense that the November gross SIP flows stood at ₹25,320 Crore, compared to gross SIP flows of ₹25,323 Crore in October 2024. The fall was purely technical, but it was a fall nevertheless. Interestingly, in FY25, SIP flows have been well above ₹20,000 Crore in all the 8 months; averaging ₹23,071 Crore; which is 38.97% higher than the average monthly flows in the previous year. This in indicative of aggressive financialization of savings. The new fund offerings (NFOs) were relatively subdued in the month of November 2024 at ₹4,052 Crore across 18 NFOs; sharply lower than the last 3 months. Out of these 18 NFOs in November 2024, 11 NFOs were from passive funds and f NFOs from equity funds; with sectoral / thematic funds again dominating.

WHO DOMINATED THE ₹1 TRILLION CLUB

We now turn to our monthly update on the Trillion Rupee Club; with a look at entries and exits. The Trillion rupee club includes fund categories with over ₹1,00,000 Crore (or ₹1 Trillion) in AUM. Out of the 39 categories of open-ended funds, there are 23 open ended fund categories with AUM of over ₹1 Trillion (up from 21 last month). Out of the 16 active debt schemes, 7 categories are in the Trillion rupee club, with Overnight Funds being the recent entrant this month. Among equity funds, 10 out of the 11 categories are already in the ₹1 Trillion club. Index ETFs (debt plus equity) continues to be the largest single category with AUM of ₹7.79 Trillion; followed by liquid funds at ₹5.29 Trillion, Sectoral / Thematic Funds at ₹4.62 Trillion and Flexi Cap Funds at ₹4.35 Trillion.

MF FLOWS BACK WITH A BANG IN OCTOBER 2024

Here is a quick look at how the monthly flows across fund categories panned out for the last 13 months. Solutions funds have been merged into hybrid funds.

Month	Debt Fund Flows (₹ Crore)	Equity Fund Flows (₹ Crore)	Hybrid Fund Flows (₹ Crore)	Passive Fund Flows (₹ Crore)	Total MF Flows (₹ Crore)
Nov-23	(4,707)	15,536	13,723	2,234	25,616
Dec-23	(75,560)	16,997	15,229	573	(40,685)
Jan-24	76,469	21,781	20,885	3,983	1,23,205
Feb-24	63,809	26,866	18,288	9,756	1,18,351
Mar-24	(1,98,299)	22,633	5,791	12,793	(1,59,387)
Apr-24	1,89,891	18,917	20,110	11,505	2,39,233
May-24	42,295	34,697	18,456	15,665	1,11,103
Jun-24	(1,07,358)	40,608	9,039	14,602	(43,109)
Jul-24	1,19,588	37,113	17,663	14,778	1,89,141
Aug-24	45,169	38,239	10,233	14,599	1,08,123
Sep-24	(1,13,834)	34,419	5,366	3,254	(71,114)
Oct-24	1,57,402	41,887	17,189	23,428	2,39,907
Nov-24	12,916	35,944	4,443	7,061	60,295

Data Source: AMFI (negative figures in brackets)

Here are some quick takeaways. Debt funds saw net inflows of ₹12,916 Crore in November 2024; just about a tenth of the previous month’s flows into debt funds. Equity fund inflows fell from a record high in October to ₹35,944 Crore in November 2024, resulting in average of ₹38,035 Crore in the last 6 months. Within the equity category, the focus has shifted from thematic funds to small and mid-cap funds in search of alpha. Flows into hybrid funds and passive funds were also tepid in November, compared to October 2024. The overall flows at ₹60,295 crore in November 2024 was almost 75% lower compared to the previous month as debt inflows tapered.

HOW THE ₹68.08 TRILLION NET AUM ADDED UP?

As of the close of November 2024, Indian mutual funds reported AUM of ₹68.08 Trillion. Here is the story of the AUM mix.

Month	Debt AUM (₹ Trillion)	Equity AUM (₹ Trillion)	Alternate AUM (₹ Trillion)	Total AUM (₹ Trillion)
Nov-23	13.58	20.33	14.87	49.05
Dec-23	12.91	21.79	15.78	50.78
Jan-24	13.77	22.50	16.17	52.74
Feb-24	14.50	23.12	16.62	54.54
Mar-24	12.62	23.49	17.02	53.40
Apr-24	14.59	24.74	17.66	57.26
May-24	15.12	25.40	18.13	58.91
Jun-24	14.13	27.68	19.08	61.16
Jul-24	15.44	29.34	19.92	64.97
Aug-24	16.00	30.09	20.35	66.70
Sep-24	14.97	31.10	20.75	67.09
Oct-24	16.64	29.89	20.46	67.26
Nov-24	16.86	30.36	20.60	68.08

Data Source AMFI

For November 2024, active debt fund AUM inched up to ₹16.86 Trillion compared to ₹16.64 Trillion at the close of October 2024. Debt fund AUM is up 24.2% on yoy basis. The AUM of equity funds also increased marginally to ₹30.36 Trillion in November 2024 from ₹29.89 Trillion in October 2024; but still lower than the September peak. On a yoy basis, the equity fund AUM is still higher by 49.3%. Alternate AUM is marginally higher over October, but shows good traction yoy. Here is a look at the AUM shares of various categories of funds as of November 2024.

Month	Active Debt Funds	Active Equity Funds	Hybrid Funds	Passive Funds	Solution Funds	Close-ended Funds
Jun-24	23.11%	45.26%	13.24%	17.14%	0.82%	0.43%
Jul-24	23.77%	45.16%	13.00%	16.86%	0.80%	0.41%
Aug-24	23.98%	45.11%	13.70%	16.80%	0.80%	0.40%
Sep-24	22.32%	46.36%	13.04%	17.08%	0.80%	0.40%
Oct-24	24.74%	44.45%	12.98%	16.67%	0.78%	0.40%
Nov-24	24.76%	44.59%	12.88%	16.60%	0.77%	0.39%

If you take a 5-month perspective (November 2024 over June 2024), equity funds continue to lead, but what one can see is that the market shares are now converging to a median figure over the last 6 months. Debt fund AUM share has been steady in last 6 months.

ACTIVE DEBT FUNDS: SECOND CONSECUTIVE MONTH OF NET INFLOWS

Debt funds saw net inflows of ₹12,916 Crore in November  2024. Big drivers of positive inflows were Low Duration Funds ₹4,374 Crore, Ultra Short Duration Funds ₹2,962 Crore, Money Market Funds ₹2,426 Crore, Corporate Bond Funds ₹2,138 Crore, Overnight Funds ₹2,019 Crore, and Gilt Funds ₹1,803 Crore. In terms of outflow categories, Liquid Funds saw net outflows of ₹(1,779) Crore, and short duration funds saw net outflows of ₹(454) Crore. The other fund categories that saw outflows were credit risk funds, banking & PSU funds, and floater funds; but the amounts were relatively smaller.

ACTIVE EQUITY FUNDS: ROBUST INFLOWS, AND NEW FAVOURITES

For the month of November 2024, equity funds saw robust net inflows of ₹35,944 Crore. Big drivers of inflows into equity funds in November 2024 were Flexi cap/ Multi-cap funds ₹8,711 Crore, Sectoral / Thematic Funds ₹7,658 Crore, Mid Cap Funds ₹4,883 Crore, Large & Mid Cap funds ₹4,680 Crore, Small cap Funds ₹4,112 Crore, large cap funds ₹2,548 Crore, and Value / Contra funds ₹2,088 Crore. None of the categories of equity funds saw negative flows among equity funds, although the flows into dividend yield funds, focused funds, and ELSS Funs were relatively tepid compared to the other categories.

HYBRID FLOWS AND PASSIVE FLOWS FALL SHARPLY IN NOVEMBER 2024

The combination of hybrid funds and solution funds got net inflows of ₹4,443 Crore in November 2024, about a fourth of the flows in October 2024. In the hybrid category, net inflows were dominated by Multi-Asset Allocation Funds at ₹2,444 Crore, Balanced Advantage Funds (BAF) ₹1,570 Crore, and Aggressive Hybrid Funds ₹914 Crore. Ironically, the arbitrage funds saw net outflows of ₹(1,353) Crore. In the passive category; inflows were dominated by index Funds ₹4,343 Crore, Index ETFs ₹1,531 Crore, and Gold ETFs ₹1,257 Crore. The passive category flows have also fallen sharply in November 2024.

Despite robust SIP flows, November 2024 saw a sharp flow in net inflows. The fall has been across categories. However, the good news is that, unlike October, the markets have remained steady, so the AUM has not really taken a hit. That is the good news!