Equity Mutual Funds See a Dip of 22% in November ’23: AMFI

Equity mutual funds inflows experienced a dip in November 2023, while investors continued to opt for small- and mid-cap funds, hoping for strong returns, as per the Association of Mutual Funds in India (AMFI) data.  

The inflows dipped 22.15% month-on-month to Rs 15,536 crore in November 2023 compared to Rs 19,957 crore in October 2023, as per the data. It has been the 33rd consecutive month of inflows on a net basis.  

Mutual fund inflows in equity-oriented schemes have stood at Rs 1.45 lakh crore so far this year, pushing benchmark indices such as Nifty 50 and BSE Sensex as well as small- and mid-caps to reach all-time highs.  

The benchmark index Nifty 50 surged by 5.52% in November 2023, its best month since July 2022, backed by favourable liquidity conditions, easing global rate concerns along with strong macroeconomic data.  

Similarly, contributions towards systematic investment plans (SIPs)  in which investors make regular payments into mutual funds touched a record high of Rs 17,073 crore in November 2023, with the number of SIP accounts rising by 14.1 lakh to 744.1 lakh, also an all-time high.

At Rs 3,699 crore, small-cap funds accounted for most of the investments for the 14th straight month, which is about 12 times the inflows of Rs 307 crore into large-caps.  

Mid-caps registered inflows to the tune of Rs 2,666 crore, as compared to Rs 2,409 crore in October 2023. Small- and mid-caps surged by 12% and 10.4%, respectively, in November 2023, backed by retail inflows.  

The small- and mid-cap indexes spiked by 48% and 40% so far in 2023, far outperforming a 15.5% gain in the benchmark index Nifty 50.  

Meanwhile, analysts are of the view that investors must act with discretion when it comes to hiking allocations into small-caps while taking into account the recent rally and stretched valuations.

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