October 2024: Indian Mutual Funds Attract a Whopping Rs 2.4 Lakh Crore Inflows
The Association of Mutual Funds in India (AMFI) has reported that monthly inflows into mutual fund Systematic Investment Plans (SIPs) breached the Rs 25,000 crore threshold for the first time in October 2024. SIP contributions for the month surged to Rs 25,323 crore, marking an all-time high compared to Rs 24,509 crore in September 2024. A year ago, in October 2023, SIP inflows were significantly lower at Rs 16,928 crore.
Record Equity Mutual Fund Inflows of Rs 41,887 Crore in October
Equity mutual funds witnessed an impressive inflow of Rs 41,887 crore in October 2024, a remarkable 21.7% increase from the previous month. This surge was largely driven by substantial investments in thematic funds, despite the ongoing volatility in the stock markets.
This marks the 44th consecutive month of positive net inflows into equity-oriented mutual funds, underscoring the growing popularity of mutual funds among Indian investors.
Hitesh Thakkar, Acting CEO of ITI Mutual Fund, highlighted that the Indian mutual fund industry is currently experiencing an all-time high in assets under management (AUM), reaching Rs 67.25 lakh crore. “The surge in hybrid funds reflects investors’ cautious approach amid market volatility, and we remain optimistic about India’s equity markets, which are expected to offer strong returns compared to other emerging markets,” Thakkar said.
Mutual Fund Industry Sees Total Inflows of Rs 2.4 Lakh Crore in October
Despite heightened volatility in global markets and significant outflows from Foreign Portfolio Investors (FPIs), who withdrew Rs 94,000 crore in October due to geopolitical concerns, the Indian mutual fund industry experienced a massive inflow of Rs 2.4 lakh crore in the month. This follows an outflow of Rs 71,114 crore in September 2024.
Debt schemes accounted for a substantial portion of the inflow, attracting investments totaling Rs 1.57 lakh crore, while equity mutual funds saw inflows of Rs 41,887 crore, a 21.7% increase from the previous month. As a result, the industry’s net AUM grew slightly to Rs 67.26 lakh crore in October, up from Rs 67 lakh crore in September.
A Strong Year-on-Year Growth
In a year-on-year comparison, mutual fund inflows in October 2024 skyrocketed by nearly 197.82%, reaching Rs 2.39 lakh crore, compared to Rs 80,528 crore in October 2023. The surge in inflows was driven by an extraordinary 269.20% increase in debt fund inflows, which amounted to Rs 1.57 lakh crore, and a 109.88% rise in equity mutual fund inflows, which reached Rs 41,887 crore.
Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics, noted that the robust growth in mutual fund investments occurred despite a broad-based sell-off in domestic equity markets, fueled by concerns over geopolitical tensions, particularly between Iran and Israel. The sell-off impacted investor sentiment, especially after muted earnings reports from major domestic companies for the second quarter of FY25.
Sectoral/Thematic Funds and Gold ETFs See Remarkable Growth
Within equity mutual funds, sectoral and thematic funds led the way with net inflows of Rs 12,279 crore, representing a significant 215.19% growth compared to the same period last year. Gold Exchange-Traded Funds (ETFs) also experienced a notable surge, with inflows rising by over 133%, totaling Rs 1,961 crore in October 2024. Gold ETFs have gained popularity among investors due to their liquidity, transparency, and alignment with global gold prices.
As the mutual fund industry continues to flourish, these trends suggest a growing confidence among investors in the long-term potential of the Indian economy, even amid global uncertainties.
