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Passive fund folios grow over 50% for first time in November 2024

14 Jan 2025 , 02:17 PM

PASSIVE FLOW STORY FOR NOVEMBER 2024

Since the robust passive inflows of October, there has been a steady fall in the next two months. Net inflows into passive funds fell nearly 70% to ₹7,061 Crore in November 2024. However, it fell by another 90% to just ₹784 Crore of net inflows in December 2024. Let us quickly look at the passive fund categories that saw robust inflows. Domestic equity index funds led the way with inflows of ₹4,543 Crore followed by Gold ETFs at ₹640 Crore, Silver ETFs at ₹477 Crore, and TMIFs at ₹445 Crore in December. Among the categories that saw net outflows in December 2024 were Debt oriented ETFs ₹(2,525) and Equity Oriented Domestic ETFs at ₹(2,470) Crore. Out of the 12 categories of passive funds with flows; 6 categories showed positive net flows and 6 showed negative flows.

HOW INDEX FUNDS AND INDEX ETF PERFORMED IN DECEMBER 2024

The table below ranks index funds and index ETFs in India on 3-year returns (regular plans). We have only considered funds where a 3-year track record is available.

Passive Fund
Scheme Name
1 Year (%) Returns 3-Year (%) Returns Launch (%) Returns
CPSE ETF 23.72 39.61 15.79
Nippon India ETF Nifty PSU Bank BEES 10.37 33.56 5.90
Kotak Nifty PSU Bank ETF 10.35 33.56 5.11
BHARAT 22 ETF 14.18 31.41 15.53
Motilal Oswal Nifty Midcap 100 ETF 19.31 22.07 15.65
ICICI Prudential Nifty Midcap 150 ETF 19.38 21.24 26.05
Nippon India ETF Nifty Midcap 150 19.28 21.23 23.63
ABSL Nifty Midcap 150 Index Fund 18.82 20.45 24.32
Motilal Oswal Nifty Midcap 150 Index Fund 18.48 20.34 26.95
Nippon India Nifty Midcap 150 Index Fund 18.40 20.31 24.32

Data Source: AMFI

There are a total of 172 index funds and index ETFs with minimum 3 year track record. If you look at the average returns, these 172 funds have generated average returns of 14.64% over a 1-year period. Over a 3-year period, the CAGR returns on these funds stands at 12.62%. Let us now shift focus to how the fund of funds (FOFs) have performed in December 2024.

HOW FUND OF FUNDS (FOF) PERFORMED IN DECEMBER 2024

The table below ranks fund of funds (FOFs) in India on 3-year returns (regular plans). We have only considered funds where a 3-year track record is available and the other funds without such a track record have been eliminated.

Passive Fund
Scheme Name
1 Year (%) Returns 3-Year (%) Returns Launch (%) Returns
ICICI Prudential BHARAT 22 FOF 14.14 31.36 18.87
ICICI Prudential India Equity FOF 22.59 19.67 24.61
Motilal Oswal Nasdaq 100 FOF 47.98 19.17 26.28
ICICI Pru Thematic Advantage Fund (FOF) 22.60 17.28 15.61
Kotak Multi Asset Allocator FOF – Dynamic 18.32 17.01 16.32
Nippon India Asset Allocator FOF 16.90 16.77 18.90
Quantum Gold Savings Fund 22.96 16.57 12.20
Axis Gold Fund 22.97 16.54 6.52
LIC MF Gold ETF FOF 23.62 16.51 5.99
SBI Gold Fund 22.79 16.49 6.46

Data Source: AMFI

There are a total of 79 fund of funds (FOF) with minimum 3 year track record. If you look at the average returns, these 79 funds have generated average returns of 14.89% over a 1-year period. Over a 3-year period, the CAGR returns on these funds stands at 9.93%. However, what is important is that in index ETFs, index funds and in FOFs, there are wide variations in terms of 3-year returns, which could be due to the disparate nature of these funds.

PASSIVE FUND FOLIO GROWTH: DECEMBER 2024 OVER DECEMBER 2023

We see some good tidings from the folio growth numbers of passive funds in December 2024. The table below compares the folio growth of these 12 categories of passive funds as of end December 2024 over December 2023.

Passive Mutual Fund
Schemes (Folios)
Folios Dec-24
(in Numbers)
Folios Dec-23
(in Numbers)
Growth
(%)
Silver ETF 6,21,639 1,52,259 308.28%
Equity oriented Index Funds (Domestic Index Funds) 1,20,10,532 58,29,735 106.02%
Equity oriented ETFs (International ETFs) 6,85,782 3,55,392 92.96%
Other Index Funds 92,034 58,245 58.01%
Equity oriented ETFs (Domestic ETFs) 1,49,47,918 1,03,28,959 44.72%
Gold ETF 64,05,088 49,11,226 30.42%
Income/Debt Oriented Index Funds (Other than TMIF) 18,470 15,324 20.53%
Income/Debt Oriented Index Funds (TMIF) 1,69,843 1,43,325 18.50%
Income/Debt Oriented ETFs 23,41,427 19,87,250 17.82%
Equity oriented Index Funds (International Index Funds) 2,54,703 2,36,818 7.55%
Fund of funds investing overseas in Active Funds 7,32,413 8,00,853 -8.55%
Fund of funds investing overseas in Passive Funds 6,39,439 7,16,186 -10.72%
Total of Passive Funds 3,89,19,288 2,55,35,572 52.41%

Data Source: AMFI (TMIF is target maturity index funds)

Here are some key inferences from the yoy growth in passive folios.

  • Passive fund folios yoy growth in December 2024 stood at 52.41%; compared to 52.42% in November, 49.71% in October, 45.71% in September, and 42.57% in August 2024. That is progressive build-up of investor intensity by growth in folios. The total folios of passive funds stand at 389.19 Lakhs as of end December 2024; compared to 382.06 Lakhs in November 2024, 368.23 Lakhs in October, and 350.60 Lakhs in September 2024.
  • What about leaders and laggards? Again, silver led folio growth at 308.28%, followed by equity oriented domestic index funds at 106.02% and equity oriented international ETFs at 92.96%. A total of 10 out of 12 categories saw folio expansion, with only FOFs investing in overseas active funds and FOFs investing in overseas passive funds; seeing a contraction in folios in December 2024 yoy.

The good news is that the folio growth in passive funds has been above 50% in a rather tough month.

PASSIVE FUNDS AUM: DECEMBER 2024 OVER DECEMBER 2023

We have seen some pressure on AUM growth of passive funds in recent months due to the market correction. Here is the AUM compared yoy

Passive Mutual
Fund Schemes
AUM Dec-24
(₹ Crore)
AUM Dec-23
(₹ Crore)
Growth
(%)
Silver ETF 12,317.45 3,031.62 306.30%
Equity oriented Index Funds (Domestic Index Funds) 1,59,156.38 84,379.58 88.62%
Gold ETF 44,595.60 27,326.41 63.20%
Equity oriented ETFs (International ETFs) 13,541.19 9,931.89 36.34%
Equity oriented Index Funds (International Index Funds) 5,498.22 4,048.45 35.81%
Equity oriented ETFs (Domestic ETFs) 6,44,370.67 5,19,927.53 23.93%
Fund of funds investing overseas in Passive Funds 8,668.84 7,382.28 17.43%
Other Index Funds 3,490.31 3,222.08 8.32%
Fund of funds investing overseas in Active Funds 17,943.96 16,681.73 7.57%
Income/Debt Oriented ETFs 95,145.89 90,131.30 5.56%
Income/Debt Oriented Index Funds (TMIF) 93,320.93 93,369.60 -0.05%
Income/Debt Oriented Index Funds (Other than TMIF) 13,611.36 14,639.51 -7.02%
Total of Passive Funds 11,11,660.80 8,74,072.00 27.18%

Data Source: AMFI (TMIF is target maturity index funds)

Here are some key inferences we can draw from the above comparative table.

  • Passive fund folios yoy growth in December 2024 tapered sharply to 27.18%; compared to 37.3% in November, 42.87% in October, and 44.92% in September 2024. The AUM growth of passive funds has surely taken a hard hit on account of weakness in indices.
  • What about leaders and laggards? Again, silver AUM led the growth at 306.3%, followed by domestic index funds at 88.6% and Gold ETFs at 63.2%. A total of 10 out of 12 categories saw folio expansion, with debt index funds (ex-TMIF) contracting -7.02% and debt oriented TMIFs contracting by -0.05% in AUM in December 2024 yoy.

While the AUM growth has been hit by the weakness in the market, the positive takeaway is that the folio growth continues to be robust.

Related Tags

  • AUM
  • GoldETF
  • IndexETF
  • IndexFunds
  • MutualFunds
  • PassiveFund
  • SIlverETF
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