Equity mutual fund AUM rockets 40% in 2024, now contributes 46% to industry total

The recent downturn in Indian markets has not dampened the sentiment of retail investors, who remain focused on long-term investing by consistently allocating funds to mutual funds in a disciplined manner.

Data released by AMFI on Thursday showed that equity mutual fund AUM reached ₹30.57 lakh crore in December, driven by strong inflows into thematic funds. In the same period last year, equity AUM stood at ₹21.79 lakh crore, marking a stellar YoY growth of 40.3%.

A decade ago, equity mutual fund AUM was just ₹1.9 lakh crore. Notably, in August 2023, equity AUM crossed the ₹30 lakh crore mark for the first time. This means that the AUM has more than doubled in less than 18 months. Equity AUM now contributes 46% to the overall AUM of the Indian mutual fund industry, which stood at ₹66.93 lakh crore at the end of December 2024.

Despite volatile market conditions, December marked the 46th consecutive month of net inflows into equity-oriented funds, highlighting the growing popularity of mutual funds among investors. Net inflows into equity schemes increased by over 14% MoM to ₹41,156 crore in December.

Gross inflows into active equity schemes crossed ₹72,000 crore, reaching ₹72,115 crore, a 17% MoM and 42.32% YoY increase. In December 2023, gross inflows stood at ₹50,670 crore.

Sectoral & thematic funds continue to dominate

Among the 11 equity mutual fund categories, sectoral and thematic funds continued to attract significant retail investor interest. Net inflows into these schemes surged to ₹15,331 crore in December, nearly double the ₹7,658 crore recorded in November. Inflows to these schemes in December 2023 were ₹6,000 crore.

This strong inflows into thematic funds expanded their AUM to ₹4.72 lakh crore in December, compared to ₹4.61 lakh crore in November. Thematic fund AUM stood at ₹2.58 lakh crore in December 2023.

Jatinder Pal Singh, CEO, ITI Mutual Fund, said, “Despite muted equity market performance during the month of December 2024, inflows in open-ended equity funds stayed in the positive zone for the 46th month in a row. Gross inflows into active equity schemes were up 17% in Dec 2024 vs Nov 2024 (month on month), crossing Rs. 72,000 crores, while net flows were recorded at Rs. 41,156 crores.”

“This increase can be attributed to the 70% absolute growth in gross inflows into sectoral/thematic equity schemes (Rs. 22,128 crores in Dec 2024 vs Rs. 13,133 crores in Nov 2024), most of which can be attributed to NFOs (12 sectoral/thematic fund NFOs). Inflows in the large-cap category were down by 8% month on month, while net flows were down 21% compared to Nov 2024,” Singh added.

Small- and mid-cap mutual fund schemes also continued to draw investor interest, with inflows reaching record highs in December, despite concerns about the risks these segments pose, according to AMFI.

The mid-cap category saw inflows of ₹5,093 crore in December 2024, while the small-cap category attracted ₹4,667 crore. AMFI noted that these are record inflows.

Large-cap schemes, often recommended as a safer bet, saw inflows decline to ₹2,010 crore in December from over ₹2,500 crore in November. The large- and mid-cap category recorded inflows of ₹3,811 crore, according to AMFI data.

Debt outflows drag overall AUM

Despite strong equity inflows, the overall mutual fund AUM declined to ₹66.93 lakh crore in December, down from ₹68.08 lakh crore a month earlier. This drop was primarily due to outflows of ₹1.27 lakh crore from debt schemes, with liquid funds seeing the highest withdrawals.

However, 2024 marked a significant milestone for the mutual fund industry, as its AUM surpassed ₹68 lakh crore for the first time in November. This represents more than a twofold increase from ₹26.54 lakh crore in 2019, achieved within just five years.

Jatinder Pal Singh said, “Debt mutual funds saw net outflows of ₹1,27,153 crores during the month, with liquid, money market, and overnight categories witnessing major outflows, mostly due to the quarter-end phenomena. Hybrid funds saw 3 NFOs and largely remained flat in terms of AUM as of Dec 2024 at 8.76 Lac crores. The month also saw 12 index funds and 2 ETFs being launched, which took the AUM of the open-ended other schemes to ₹11.11 lakh crore.”

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