Despite significant fall in stock market investments in MFs marks a record in October

New Delhi [India], November 15 : Despite a significant decline in the Indian stock markets in October 2024, investors maintained strong interest in equity linked schemes like mutual funds, particularly through systematic investment plans (SIPs).
As per a report by Motilal Oswal, inflows into mutual funds, SIPs reached a record Rs 253.2 billion for the month, marking an increase of 3.3 per cent compared to the previous month and a significant 49.6 per cent jump from October 2023.
This growth shows the sustained confidence of retail investors in long-term disciplined investments despite short-term market fluctuations.
The report said "Investors continued to park their money in mutual funds, with inflows into systematic investment plans (SIPs) reaching a new peak of Rs 253.2b in Oct'24 (up 3.3 per cent MoM and 49.6 per cent YoY).
However, the mutual fund industry's presence in the equity segment showed a slight decline in October. The assets under management (AUM) of equity funds fell by Rs 1,234 billion, while other exchange-traded funds (ETFs) saw a reduction of Rs 274 billion compared to the previous month.
The report said "Conversely, AUM of equity funds declined by Rs 1,234 b and other ETFs by Rs 274 b MoM".
Despite these declines in specific segments, the total AUM of the mutual fund industry rose by 0.2 per cent month-on-month to Rs 67.3 trillion.
This growth was supported by increased AUM in liquid funds, which saw a boost of Rs 1,138 billion, and income funds, which increased by Rs 495 billion.
The report also mentioned that the Sector-wise, the distribution of mutual fund investments in October saw notable shifts. Allocations to banks (both private and public), capital goods, healthcare, technology, and cement sectors grew.
Meanwhile, investments in oil and gas, consumer durables, automobiles, non-banking financial companies (NBFCs), utilities, retail, telecom, and metals sectors saw reductions.
The month also recorded a historic high in net equity inflows, which surged to Rs 498 billion, reflecting a 75 per cent increase compared to the year-to-date period in 2024. This rise highlights the positive sentiment among investors, who are likely seeing opportunities for growth despite recent market corrections.
Additionally, redemptions declined significantly in October, down by 22.1 per cent from the previous month, further reinforcing the optimistic outlook among mutual fund investors.
The October data demonstrates resilient investor sentiment in India's mutual fund industry, with record SIP inflows, all-time high net equity inflows, and a continued rise in AUM, driven by strong interest in liquid and income funds despite volatility in equity markets.