By Bharath Rajeswaran
BENGALURU (Reuters) – Inflows into India’s equity mutual funds nearly tripled in August, with investors continuing to prefer small- and mid-cap funds on hopes of strong returns, data from the Association of Mutual Funds in India (AMFI) showed on Monday.
Equity mutual funds saw inflows rise sequentially for the 30th consecutive month to 202.45 billion rupees ($2.44 billion) last month from 76.26 billion rupees in July, according to the data.
While the benchmark Nifty 50 fell 2.53% in August, snapping a five-month winning streak, it was outpaced by a 3.70% gain in the Nifty mid-cap 100 and a 4.62% increase in the Nifty small-cap 100.
Small-cap funds accounted for most of the investments for the 11th straight month at 42.65 billion rupees, compared with outflows worth 3.49 billion rupees from large-cap funds, the data showed.
Mid-cap funds saw inflows worth 25.12 billion rupees from retail investors in August.
So far in 2023, the small-cap index has risen 33.5%, while mid-caps have jumped 31.2%, compared to a 10% gain in Nifty 50.
“The interest in small-cap and mid-cap equity mutual funds comes after sharp correction in the broader markets over the last two years, aided by strong macroeconomic fundamentals,” said NS Venkatesh, chief executive of AMFI.
Small-caps have seen 260.04 billion-rupee inflows so far in 2023, compared to inflows of 139.35 billion rupees in mid-caps and 36.07 billion rupees outflows from large-cap funds.
Contributions through systematic investment plans (SIPs) – in which investors make regular payments into mutual funds – hit a high of 158.14 billion rupees in August, when 3.59 million new SIP accounts – a record – were opened.
The rise in equity mutual fund inflows in August was in contrast with the moderation in foreign portfolio investors (FPIs) buying in domestic equities.
($1 = 82.8870 Indian rupees)
(This story has been refiled to add dropped words ‘inflows into’ in paragraph 1)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sonia Cheema)
