54% equity mutual funds outperformed benchmarks in April across various categories. Contra funds led with 100% outperformance. Value, ELSS, Large & Mid Cap, Flexi Cap, and Multi Cap funds also showed strong performance.
Around four equity mutual fund categories received inflows of more than Rs 20,000 crore in FY24. Smallcap funds gained the maximum traction and received a total inflow of Rs 40,282.73 crore in FY24.
The sectoral/thematic funds again managed to gain investors interest as the category saw the highest inflows to the tune of Rs 4,804.69 crore in January compared to Rs 6,005.49 crore in December. Smallcap funds witnessed the second-highest inflows of Rs 3,256.98 crore.
The strong traction in equity funds was led by mid-cap and small-cap funds which continued to attract investor interest during August even though large cap funds saw continued outflows amidst profit booking.
Debt mutual fund schemes have outperformed equity mutual funds in recent months, benefiting from inflows totalling INR 1.5 lakh crore ($22bn) during April and May, compared to just over INR 7,200 crores across all equity mutual fund categories. Adil Shetty, the CEO of BankBazaar.com, suggested that equity underperformance strayed from a variety of reasons: investor liquidity needs, profit-taking as markets edge towards new highs, and higher bond yields making debt funds more attractive. Nonetheless, experts have cautioned against an investment exclusively in debt funds and urge rebalancing portfolios to reduce risk and boost wealth.
Investing in equity mutual funds has become increasingly popular in recent years, with the steady influx of SIP (Systematic Investment Plan) flows indicating a growing interest in this asset class.