Small-Cap Mutual Fund Inflows Surge 23% in January as Equity Fund Inflows Dip 4%

In January, small-cap mutual fund inflows surged 23% to ₹5,720 crore, while overall equity fund inflows declined 4% to ₹39,687 crore. Debt mutual funds rebounded with ₹1.28 lakh crore in inflows, led by liquid funds at ₹91,592 crore. Total net inflows into open-ended mutual funds soared to ₹1.87 lakh crore, up from ₹80,509 crore in December.

CONTENTS:

• Equity Fund Inflows Remain Strong at ₹39,688 Crore in January Despite Market Volatility: AMFI
• Small-Cap Mutual Fund Inflows Surge 23% in January, Overall Equity Fund Inflows Decline 4%

Small-Cap Mutual Fund Inflows Surge 23% in January as Equity Fund Inflows Dip 4%

Small-Cap Mutual Fund inflows saw a slight decline of 3.6% in January, totaling ₹39,687.78 crore, as per data released by the Association of Mutual Funds in India (AMFI) on February 12. Despite this marginal drop, net investments in open-ended equity funds remained positive for the 47th consecutive month, reflecting sustained investor confidence.

Meanwhile, contributions through Systematic Investment Plans (SIPs) remained strong, exceeding ₹26,000 crore. The total SIP inflow for January stood at ₹26,400 crore, marking a minor 0.2% dip from ₹26,459 crore recorded in December.

Equity Fund Inflows Remain Strong at ₹39,688 Crore in January Despite Market Volatility: AMFI

Equity Small-Cap Mutual Fund inflows dipped slightly by 3.6% in January, amounting to ₹39,687.78 crore, as per data released by the Association of Mutual Funds in India (AMFI) on February 12. Despite this minor decline, inflows remained in positive territory for the 47th consecutive month, signaling sustained investor confidence.

Meanwhile, contributions through Systematic Investment Plans (SIPs) stayed robust, exceeding ₹26,000 crore for the month. January’s SIP inflow stood at ₹26,400 crore, reflecting a marginal 0.2% decrease from ₹26,459 crore in December.

The dip in inflows coincided with a weak equity market performance in January, during which the BSE Sensex dropped 1.28% and the NSE Nifty 50 fell 0.99%.

Equity Fund Performance Across Categories

Among equity mutual fund categories, small-cap funds saw a notable 22.6% rise in inflows, reaching ₹5,720.87 crore, while mid-cap funds recorded a slight increase to ₹5,147.87 crore. Large-cap fund inflows surged by 52.3% to ₹3,063.33 crore.

Conversely, Sectoral/Thematic Funds experienced a sharp 41.2% decline in inflows, totaling ₹9,016.60 crore, largely due to fewer new fund offers during the month. AMFI data revealed that mutual funds raised ₹2,838 crore through three Sectoral/Thematic Funds in January.

Debt Fund Inflows Rebound

Debt mutual funds saw a significant turnaround, recording net inflows of ₹1,28,652.58 crore in January, compared to net outflows of ₹1,27,152.63 crore in December. The Liquid Fund category led the recovery with ₹91,592.92 crore in inflows, followed by Money Market Funds at ₹21,915.53 crore. However, Short Duration Funds and Gilt Funds witnessed net outflows of ₹2,066.19 crore and ₹1,359.66 crore, respectively.

Hybrid Funds See Strong Growth

Hybrid funds, which allocate investments across equity, debt, and commodities, registered a sharp 100.6% rise in net inflows, reaching ₹8,767.52 crore. Arbitrage Funds attracted the highest inflows at ₹4,291.74 crore, rebounding from net outflows of ₹409.09 crore in December. Multi Asset Allocation Funds received ₹2,122.85 crore in investments, though inflows declined 17.6% from the previous month.

Overall Mutual Fund Industry Performance

Total net inflows into open-ended mutual funds stood at ₹1,87,606.23 crore in January, a significant reversal from the net outflows of ₹80,509.20 crore recorded in December. The total net assets under management (AUM) of the Indian mutual fund industry reached ₹67.25 lakh crore, up from ₹66.93 lakh crore in December.

Small-Cap Mutual Fund Inflows Surge 23% in January, Overall Equity Fund Inflows Decline 4%

In January, despite challenges in the domestic stock market, investors displayed a strong risk appetite, particularly for small-cap mutual funds, which saw a 23% rise in inflows, reaching ₹5,720 crore. However, overall equity mutual fund inflows declined by 4%, totaling ₹39,687 crore.

All equity mutual fund categories recorded inflows, with sectoral and thematic funds leading at ₹9,016 crore, followed by small-cap funds. Flexi-cap funds attracted ₹5,697 crore, while dividend yield funds received the lowest inflow at ₹214 crore.

Month-on-month, ELSS funds saw the highest surge in inflows, increasing 324% to ₹797 crore from ₹187 crore in December. Focused funds also witnessed a 72% rise, reaching ₹783 crore. However, inflows into sectoral and thematic funds dropped 41% from ₹15,331 crore in December to ₹9,016 crore in January.

Debt mutual funds turned positive, recording an inflow of ₹1.28 lakh crore in January compared to an outflow of ₹1.27 lakh crore in December. Among debt categories, liquid funds received the highest inflows at ₹91,592 crore, followed by money market funds at ₹21,915 crore and overnight funds at ₹18,936 crore.

Hybrid mutual funds saw a 101% increase in inflows, reaching ₹8,767 crore in January, with arbitrage funds leading at ₹4,291 crore. However, conservative hybrid funds experienced an outflow of ₹194 crore.

Other investment schemes, including index funds and ETFs, saw inflows surge by 1,207% to ₹10,225 crore. Index funds attracted ₹5,254 crore, while Gold ETFs received ₹3,751 crore. ETFs saw an inflow of ₹1,171 crore, recovering from a ₹4,558 crore outflow in December.

The overall inflows into open-ended mutual funds totaled ₹1.87 lakh crore in January, significantly up from ₹80,509 crore in December. The total assets under management (AUM) of open-ended schemes grew slightly by 0.49%, reaching ₹66.98 lakh crore.

Additionally, 12 new mutual funds were launched, collectively raising ₹4,544 crore, with sectoral and thematic NFOs contributing ₹2,838 crore.