Which mutual fund categories recorded most inflows, outflows in December?

The assets under management of Indian mutual funds increased to Rs 37.72 trillion as on December 31, 2021 from Rs 37.33 trillion a month before, mainly because domestic investors continued to invest in equity schemes.

Equity MFs recorded net inflows of Rs 25,076 crore during December, more than double November’s level of Rs 11,614 crore, according to data from the industry group Association of Mutual Funds in India (AMFI).

Debt funds recorded net outflows of Rs 49,154 crore while hybrid funds—schemes which invest across equity, debt and gold—recorded net inflows of Rs 550 crore thanks to balanced advantage funds.

Systematic investment plans (SIP) continued to be the favoured mode of investments for retail investors. The number of SIP accounts rose to 4.90 crore in December from 4.78 crore a month before while SIP inflows increased to Rs 11,305 crore from Rs 11,004 crore.

The growth in SIP accounts and amounts show that retail investors are understanding the nuances of managing market volatility and risk adjustment, AMFI CEO NS Venkatesh said in a report by Moneycontrol.

MF categories with most inflows

All equity fund categories recorded net inflows in December, with multi-cap schemes cornering more than 40% of total net inflows.

AMFI data show that such schemes got net inflows of Rs 10,516 crore in December, thanks to three new fund offers raising Rs 9,509 crore. These three NFOs were of multi-cap funds launched by Axis MF, HDFC MF and IDFC MF.

Thematic and sectoral funds were at No.2 position in terms of most new inflows, garnering Rs 3,769 crore. This was thanks to three NFOs of Aditya Birla Sun Life Business Cycle Fund, ITI Banking and Financial Service Fund, and Nippon India Taiwan Equity Fund raising Rs 2,937 crore.

Many investors also preferred flexi-cap funds, which are among the all-time favourites. Such funds received net inflows of Rs 2,408 crore.

Among hybrid funds, balanced advantage schemes received net inflows of Rs 3,792 crore in December. Balanced advantage funds have been an investor favourite in recent months as equity markets trade at record highs.

Gold exchange-traded funds and other ETFs recorded net inflows of Rs 313 crore and Rs 13,550 crore, respectively. Six ETF NFOs, including that of Bharat Bond ETF-April 2032, raised Rs 6,409 crore.

Among debt funds, only two categories received significant net inflows. Overnight and dynamic bond funds recorded net inflows of Rs 4,730 crore and Rs 1,039 crore respectively.

MF categories with most outflows

In the hybrid MF category, arbitrage funds recorded the most outflows of Rs 4,304 crore in December 2021. This compares with net inflows of Rs 1,045 crore in November. The outflows could be because investors’ expectation of higher volatility in stock markets in coming months.

Debt funds recorded net outflows of Rs 49,154 crore in December, compared with net inflows of Rs 14,893 crore. This could be because of quarter-end withdrawals by companies to pay taxes.

Among debt funds, low-duration schemes recorded highest net outflows of Rs 11,067 crore. This was followed by liquid funds with outflows of Rs 8,698 crore and ultra-short duration funds with outflows of Rs 8,347 crore.

Money market funds and banking and PSU funds recorded net outflows of Rs 7,028 crore and Rs 6,217 crore, respectively.