Investment Insights and Trends

After a favorable month of August, September was not a very great month for Equity markets as Nifty posted a fall of more than -3.50% in the month and closed at levels of 17,079. Contrary to the previous month, FII turned negative with an outflow of Rs. 18,308 crores and DII showed positive flows of Rs. 14,119 crores.??

Mutual Fund?

The total AUM went down by nearly -2% and is now at Rs. 38.42 lakh crores from Rs. 39.33 Lakh crore in the previous month.? The number of funds launched was also very low compared to the previous month. In the month of September, we witnessed 3 debt, 5 equity 1 Hybrid, 1 Retirement Fund and 10 passive funds adding to the basket.??

There were Net outflows of ~INR 41,000 crores contrary to huge positive flows in the preceding month. Debt Funds were major contributors with outflows of nearly Rs. 65,000 crores but Equity and other passive funds showed positive flows. Within Debt Funds,? money started moving out of categories like Liquid Funds, Ultra Short-term Funds, Low Duration Funds, and Short Duration Funds which received positive flows in the previous month.?

Within Equity maximum money flowed in Sectoral/Thematic funds followed by Midcap Funds, Small cap Funds and Large & Midcap Funds and overall long-only equity funds report net inflows of Rs. 14,099 crores.?

Passive Funds/ETFs are gaining market share at a very high rate as currently, they are 15% of the total MF AUM which was nearly 11% a year back and nearly 6.5% 3 years back.?

Investor wise break-Up?

The total number of folios increased to 13.80 crores compared to 13.65 crores a month back.?

Individual investors now hold a relatively higher share of industry assets, i.e. 57.1% in Sep 2022, compared with 54.5% in? Sep 2021. Individual investors primarily hold equity-oriented schemes as 80% invest in them.?The value of assets held by individual investors increased from Rs. 20.30 lakh crores in September 2021 to Rs. 22.75 lakh crores in September 2022, an increase of 11.60%.?

SIP has been gaining popularity among Indian MF investors as September was the fifth consecutive month in which at SIP contribution was above Rs. 12,000 crores mark and the number of new SIP registrations was 22.66 lakh.? FYTD 2023 total SIP flows crossed Rs. 74,000 crores in just 6 months which is way higher than total yearly SIP flows a year back.?

Portfolio Management Services AUM?

The total AUM of PMS as of September 2022 stands at 25.80 lakh crores demonstrating a rise of 15% in the last year and 0.82% compared to the previous month.??

84% of the AUM lies in Discretionary PMS having 1,31,035 clients followed by 8% in Advisory with 1,936 clients and 8% in Non-Discretionary PMS contributed by a total of 5,410 clients.?

Conclusion?

Contrary to the previous month, the MF AUM has gone down because of net outflows are Debt as well as hybrid funds whereas Equity and other passive funds remained attractive. The key reason for inflows might be New Fund offers as we saw 5 equity NFOs (1 Midcap, 3 Sectoral, 1 Flexicap) mobilizing a total of 5836 crores and 10 Passive funds which attracted fresh flows of 7257 crores as per AMFI data. In the month of October too, there are many New Fund offers lined up and mostly they are commodity ETFs (Gold & Silver) and Debt ETFs which clearly demonstrates that passive is getting popular going ahead.?