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Rs 50 Trillion Party! Mutual Funds Boom as Investors Stay Happy

The Indian mutual fund industry saw its money pot grow to over Rs 50 trillion in December, thanks to more people investing and the rise in India’s stock market. This info comes from the Association of Mutual Funds of India (AMFI), which keeps tabs on mutual funds.

Here’s the scoop: the total money managed by these funds hit Rs 50.80 trillion in December, up from Rs 48.78 trillion in November 2023. This growth happened mainly because the stock market did really well. In December, BSE Sensex went up by 7.53 percent, and NSE Nifty by 7.93 percent.

People are keen on investing too! Money put into systematic investment plans (SIPs) increased to Rs 17,610 crore in December, showing that regular investors are feeling pretty confident.

The head honcho at AMFI, Venkat Chalasani, mentioned that while it took a long time to reach the first Rs 10 trillion, hitting the last Rs 10 trillion milestone only took a little over a year. Everyone involved—from the funds themselves to the regulators—worked hard to get more people interested in investing.

But here’s the kicker: in December, more money flowed into open-ended equity mutual funds, reaching Rs 16,997 crore, which is 9 percent more than November. However, midcap funds saw less money coming in compared to the previous months, probably because some investors thought it was a good time to cash in on their gains.

Throughout the year, smallcap funds got Rs 41,035 crore, midcap funds got Rs 22,913 crore, but largecap funds saw Rs 2,968 crore going out.

On the other side of the investment world, debt funds saw more money going out—around Rs 75,560 crore in December. Liquid funds took the biggest hit, losing Rs 39,675 crore, followed by low-duration and money market funds.

Gopal Kavalireddi, Vice President of Research at FYERS, explained that the drop in overall investment was due to things like tax payments, people cashing out from debt funds, and higher stock prices.

Hybrid funds, which mix things up between stocks and bonds, were popular too. They got around Rs 15.009 crore in December, with a chunk of that coming from arbitrage funds. Some investors are switching their money between stocks and bonds as the Indian market hits record highs.

Throughout the year, about Rs 1.61 trillion flew into equity funds, with a good chunk—39 percent or Rs 63,949 crore—landing in mid and small-cap mutual funds. Sectoral or thematic funds also did well, getting Rs. 30,841 crore for the year. But largecap and focused funds saw a small drop in investment, around 1.7 percent each.

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