The Reserve Bank of India (RBI) raised the repo rate by 40 basis points in an unexpected monetary policy committee meet that was held in the month of May. That was an immediate fallout of growing inflation which, in turn, adversely impacted the investing sentiment.
In the next four months, the RBI raised the repo rate by half percentage point each on three occasions.
These repo rate hikes, growing inflation and global market downturn collectively left the financial markets battered. And the impact on mutual funds inflows was direct.
Although inflow of equity funds witnessed a steep fall for two months in a row (July and August), the last month (i.e., September) saw a trend reversal when net inflows into equity funds jumped to ₹14,099.73 crore from ₹6,120 crore in August, according to the data released by the Association of Mutual Funds in India (Amfi).
Here we list out some of the category of mutual funds that saw an increase in assets under management (AUMs) and in net inflow in some cases.
Category of funds that saw a jump in AUMs during the months of repo rate hikes:
Long duration debt funds:
| Month | Net AUM ( ₹crore) | Net inflow ( ₹crore) |
| June | 2,508.48 | 36.65 |
| July | 2,570.32 | 32.78 |
| August | 2,732.89 | 97.18 |
| Sept | 2,828.43 | 110.76 |
As we can see in the table above, net assets under management (AUMs) of long duration debt funds for the month of June were ₹2,508 crore and the average inflow during the month of June was ₹36.65 crore. The net AUM rose in the successive months to ₹2,570 crore, ₹2,732 crore and ₹2,828 crore with inflow rising by ₹32.78 crore, ₹97.18 crore and ₹110.76 crore, respectively.
Mid-cap funds:
| Months | Net AUM ( ₹crore) | Net inflow ₹crore) |
| June | 1,50,744.39 | 1,851.67 |
| July | 1,68,438.05 | 1,244.67 |
| August | 1,78,094.34 | 1,479.42 |
| Sept | 1,78,867.43 | 2,151.15 |
Among equity funds, mid cap, multi cap and sectoral/thematic funds saw an increase in total assets under management (AUM) during the past four months while the net inflow also saw an uptick.
As the table above shows, the net assets under management (AUMs) of mid cap funds for the month of June were ₹1.50 lakh crore with a net inflow of ₹1,851 crore. This rose to ₹1.68 lakh crore, ₹1.78 lakh crore and ₹1.788 lakh crore in the months of July, August and September, respectively.
Multi cap funds:
| Month | Net AUM ( ₹crore) | Net inflow ( ₹crore) |
| June | 53,297.70 | 970.24 |
| July | 59,303.98 | 524.01 |
| August | 62,108.53 | 392.66 |
| Sept | 62,435.41 | 724.71 |
Also, the net assets under management of multi cap funds also saw an increase. In the month of June, net AUM stood at ₹53,297 crore with an inflow of ₹970 crore. In the successive months, the net AUM rose to ₹59,303 crore, ₹62,108 crore and ₹62,435 crore for the months of July, Aug and September, respectively.
The increase in AUMs was seen in the sectoral/ thematic funds as well. The net assets under management (AUMs) in the month of June for sectoral/ thematic funds were ₹1,41,636 crore with net inflow during the month of June at ₹1,677 crore. The net AUMs rose for the next three months to ₹1.54 lakh crore, ₹1.57 lakh crore and ₹1.59 lakh crore in July, Aug, September, respectively.
Jump in SIPs
In the month of September, systematic investment plan (SIP) contribution of ₹12,976.34 crore was at an all-time high, and up from ₹12,693.45 crore in August.
The SIP AUM stood at ₹6.35 trillion in September against ₹6.39 trillion for the month of August.
“Small investors have shown consistent faith in mutual fund investments. They see SIP as wealth accumulation and wealth creation over a longer term. Investors must stay focussed on their goals and continue to invest in Mutual funds and not lose the opportunity,” said N. S. Venkatesh, Chief Executive, AMFI.
The Amfi data also showed that mutual fund folios crossed all-time high of 13.81 crore. The mutual fund industry’s net assets under management (AUM) stood at ₹38.42 trillion.
