Why Did Equity MF Inflows Jump So Fast in November? Data Shocks Experts
November saw a sharp jump in equity MF inflows as SIPs stayed strong and lumpsum investments suddenly surged 274%. Here’s what drove the big market shift.
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The Indian mutual fund industry saw a resurgence of equity flows in November. Steady SIP payments and a resurgence of lump-sum purchases have increased Nuvama Research's monthly review of the industry.
The report has stated that SIP inflows have remained strong at Rs 294 billion, which is approximately the same as last month. According to the brokerage, the constant SIP investments indicate that the retail investors have kept their monthly commitments unchanged even though the markets showed volatility throughout the month.
There has been a huge turnaround in the investor's sentiment towards lump-sum payments. One-off payments—that had been decreasing lately—suddenly showed a phenomenal growth of 274% month-on-month and amounts to Rs 98.8 billion. The net active equity inflows, therefore, have been increased to Rs 393 billion, which is a 22.2% rise compared to October.
The overall market played the other way; the Nifty 50's return of 1.9% in November not only pulled the active equity assets gain but also increased the AUM to Rs 44.4 trillion, which is a 1.5% rise from the previous month, as the report also mentioned.
The period from April to November saw a total of Rs 2.9 trillion flowing into active equity funds, which is the cumulative net flows during that time. Although this figure is healthy, it is still 12.9% lower than the same period last year, and it is around 8% of the industry's opening AUM for FY26.
The largest part of the inflow came from large-cap and mid-cap schemes, which together made up 27% of the total inflows. Flexi-cap funds were next with 20.7%, while small-cap strategies attracted 11.2%. Thematic funds were a small segment of 4.7% of the month's equity allocations.
The market witnessed the introduction of seven new equity NFOs, which together collected ₹26.6 billion. On the other hand, the existing schemes experienced a strong recovery, as the inflows increased by 32.2% month-on-month, reaching Rs 366.7 billion.
From the passive standpoint, ETFs and index funds together attracted Rs 154 billion, which is a slight decrease from the previous month. Gold ETFs and foreign foFs contributed a total of Rs 39 billion to the latter part of the month. The funds in the arbitrage category, which are the ones that are usually provided with treasury allocations, had a significant retreat as the influx decreased by almost 40% bringing it down to Rs 42 billion.
The space of debt flows was comparatively silent. Equity-oriented schemes had net inflows of Rs 144 billion while liquid funds went through heavy withdrawals of Rs 406 billion, which is indicative of the short-term cash movements of corporates and institutions.
Nuvama Research, on the other hand, said that the combination of stable SIP volumes and much better equity market sentiment is expected to be the main driver of the industry’s growth path in the coming months of the financial year.
