Oct-24 sees record equity fund flows and highest SIP flows

13 Nov 2024 , 09:26 AM

OCT-24 AUM FLAT DESPITE ROBUST MONTHLY FLOWS

The net outflows from debt funds in September 2024 was flat, despite the robust inflows. In the month of October, overall net inflows were above ₹2.39 Trillion, but the heavy sell-off by the FPIs in the market to the tune of over $11.3 billion resulted in the net AUM almost flat at ₹67.26 Trillion. The good news is that, debt funds saw positive flows to the tune of ₹1.57 Trillion, but that was just part of the story. Even inflows into equity funds stood at record levels of at ₹41,887 Crore. It was once again, the sectoral and thematic funds that led the flows into equity funds, but there were meaningful contributions from flexi-cap funds, mid-cap funds, and small cap funds. Unlike the previous months, even the flows into hybrid funds and passive funds were back to robust levels in October 2024.

HOW SIPS AND NFOS SHAPED FLOWS IN OCTOBER 2024

Once again, October 2024 saw robust contributions from SIPs and NFOs. For October 2024, the gross SIP flows were at a record level of ₹25,323 Crore, which is 3.32% higher than September 2024. In FY25, SIP flows have been well above ₹20,000 Crore in all the 7 months; averaging ₹22,750 Crore; which is about 37.03% higher than the average monthly flows in the previous year. This clearly points to aggressive financialization of savings. The new fund offerings (NFOs) were relatively subdued in the month of October 2024 at ₹6,078 Crore across 29 NFOs; sharply lower than ₹14,575 Crore across 27 NFOs in September 2024 and ₹13,815 Crore across 18 NFOs in August 2024. Out of these 29 NFOs in October 2024, 23 NFOs were from passive funds which included 17 index funds, 5 index ETFs and 1 gold ETF. Out of the remain 6 NFOs, 4 were sectoral / thematic NFOs. In terms of amount raised, sectoral / thematic funds accounted for 57.9% of overall NFO flows in October 2024.

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 21 open ended fund categories with AUM of over ₹1 Trillion; the same as last month. Out of the 16 active debt schemes, 6 categories are in the Trillion rupee club. 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 ₹7.83 Trillion; followed by liquid funds at ₹5.27 Trillion, Sectoral / Thematic Funds at ₹4.52 Trillion and Flexi Cap Funds at ₹4.27 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)
Oct-23	42,634	19,957	10,250	7,746	80,529
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

Data Source: AMFI (negative figures in brackets)

Here are some quick takeaways. Debt funds saw net inflows of ₹1,57,402 Crore in October 2024l; a sharp recovery from the treasury outflows of the previous month. Equity fund inflows were at a record ₹41,887 Crore in October 2024, resulting in average of ₹37,827 Crore in the last 6 months. Within the equity category, the focus has been on thematic funds; although smaller categories are seeing the return of alpha hunting. October 2024 not only saw revival in hybrid and passive flows; but the overall flows were also at a record level of ₹2.40 Trillion for the month.

HOW THE ₹67.26 TRILLION NET AUM ADDED UP?

As of the close of October 2024, Indian mutual funds reported AUM of ₹67.26 Trillion. Here is the story of the AUM mix.

Month	Debt AUM (₹ Trillion)	Equity AUM (₹ Trillion)	Alternate AUM (₹ Trillion)	Total AUM (₹ Trillion)
Oct-23	13.54	18.79	14.10	46.72
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

Data Source AMFI

For October 2024, active debt fund AUM spiked to ₹16.64 Trillion compared to ₹14.97 Trillion at the close of September 2024. Debt fund AUM is up 22.9% on yoy basis. On the other hand, AUM of equity funds fell to ₹29.89 Trillion in October 2024 from ₹31.10 Trillion in September 2024. On a yoy basis, the equity fund AUM is still higher by 59.1%. Alternate AUM is marginally lower over September, but shows good traction yoy. Here is a look at the AUM shares of various categories of funds as of October 2024.

Month	Active Debt Funds	Active Equity Funds	Hybrid Funds	Passive Funds	Solution Funds	Close-ended Funds
May-24	25.67%	43.11%	13.28%	16.70%	0.80%	0.44%
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%

If you take a 5-month perspective (October 2024 over May 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. However, a couple of bull markets can change the equations rapidly.

ACTIVE DEBT FUNDS: THAT WAS THE STAR OF OCTOBER 2024

Debt funds saw net inflows of ₹1,57,402 Crore in October 2024. Big drivers of positive inflows were Liquid Funds ₹83,863 Crore, Overnight Funds ₹25,784 Crore, Money Market Funds ₹25,303 Crore, Ultra Short Duration Funds ₹7,054 Crore, Low Duration Funds ₹5,600 Crore, and Corporate Bond Funds ₹4,644 Crore. Obviously, there were not too many outflow categories among debt funds. Credit Risk Funds and Medium Duration Funds saw net outflows, but the amounts were not exactly material.

ACTIVE EQUITY FUNDS: ROBUST INFLOWS, EVENLY DISTRIBUTED

For the month of October 2024, equity funds saw robust net inflows of ₹41,887 Crore. Big drivers of inflows into equity funds in October 2024 were Sectoral / Thematic Funds ₹12,279 Crore, flexi cap/ multi-cap funds ₹8.778 Crore, Large & Mid Cap funds ₹4,857 Crore, mid-cap Funds ₹4,683 Crore, small cap funds ₹3,772 Crore, Large Cap funds ₹3,452 Crore, and Value / Contra funds ₹2,457 Crore. None of the categories saw negative flows among equity funds, although the flows into dividend yield funds, focused funds, and ELSS Funs were tepid.

HYBRID FLOWS AND PASSIVE FLOWS GET A BOOST IN OCTOBER 2024

The combination of hybrid funds and solution funds got net inflows of ₹17,190 Crore, sharply higher than in August and September 2024. In the hybrid category, net inflows were dominated by Arbitrage Funds ₹7,182 Crore, Multi-Asset Allocation Funds (MAAF) ₹3,797 Crore, Balanced Advantage Funds ₹2,456 Crore, Equity savings funds ₹1,748 Crore, and Aggressive Hybrid Funds ₹1,371 Crore. Out of the passive category; inflows were dominated by index ETFs ₹13,442 Crore, Index Funds ₹7,931 Crore, and Gold ETFs ₹1,962 Crore. The passive category flows were largely driven by the NFOs in October 2024.

Just the final word. October 2024 has seen a smart acceleration in flows and also in spread as measured by the SIP flows. What is interesting is that even in the midst of the sell-off, the retail appetite has remained strong. However, retail appetite is best tested when bad markets persist for a longer period. Of course, the mutual funds would be hoping that does not happen and disrupt the pace of flows into mutual funds.