The mutual fund industry in India ended 2024 on a high note, achieving remarkable milestones that reflect growing investor confidence and an evolving investment culture. December 2024 marked a pivotal month, with equity mutual funds witnessing a significant surge in inflows, rising by 14.5% to ₹41,155.91 crore from ₹35,943.49 crore in November. This data, reported by the Association of Mutual Funds in India (AMFI), highlights the resilience of retail and institutional investors in the face of market volatility. The record-breaking figures not only underscore the trust in India’s equity markets but also demonstrate the effectiveness of mutual funds as a wealth creation tool. In fact, what this growth trend means is that mutual funds are increasingly becoming a popular and favourite choice for a huge number of households in India.
Category-wise Inflows
The surge in equity fund inflows can be attributed to diverse trends across fund categories:
Sectoral/Thematic Funds: Inflows doubled month-on-month to ₹15,331.54 crore, driven by the launch of 12 new funds during the month.
Mid-Cap Funds: Inflows increased by 4% to ₹5,093 crore.
Small-Cap Funds: Inflows rose by 13.5% to ₹4,667 crore.
Large-Cap Funds: In contrast, inflows declined by 21% to ₹2,010 crore.
Systematic Investment Plans (SIPs)
Systematic Investment Plans (SIPs) have consistently been the backbone of retail participation in mutual funds. SIP contributions reached a record high of ₹26,459.49 crore in December 2024, reflecting investors’ steadfast commitment to their financial goals.
October 2024: SIP contributions surpassed the ₹25,000 crore mark for the first time, reaching ₹25,322.74 crore. This achievement underscored the increasing preference for systematic investment among retail investors.
November 2024: Contributions remained robust at ₹25,319.66 crore, maintaining the momentum from October. The number of SIP accounts reached an all-time high of 10.22 crore, indicating sustained investor interest.
December 2024: SIP contributions achieved a new record of ₹26,459.49 crore, reflecting a continued upward trajectory in investor participation.
The record SIP contributions in the last quarter of 2024 underscore the pivotal role of systematic investment plans in India’s mutual fund industry.
Overall Mutual Fund Industry
Despite the robust inflows into equity funds, the mutual fund industry recorded a net outflow of ₹80,509 crore in December 2024, primarily due to significant withdrawals from debt mutual funds, which saw an outflow of ₹1.27 lakh crore.
Market Performance
In December 2024, India’s benchmark indices, NSE Nifty 50 and BSE Sensex, declined by about 2%. However, the broader small-cap and mid-cap indices rose by 0.6% and 1.4%, respectively, indicating a shift in investor preference towards these segments.
Investor Sentiment
The sustained inflows into equity mutual funds, especially through SIPs, highlight the growing maturity and confidence of investors in the Indian mutual fund industry. The record-breaking 22.50 crore mutual fund folios in December underscore investors’ confidence in the industry’s ability to deliver long-term value despite short-term fluctuations. SIPs, in particular, remain a favoured route for disciplined investing. It is a strong sign that a lot and lot of investors are resorting to long-term strategies for handling the instances of market volatility and for achieving stability in their finances.
Summing Up
Overall, the data for the month of December 2024 reflects a robust growth trajectory for India’s mutual fund industry, with equity funds attracting significant investments and SIPs reaching new heights. This trend underscores the increasing investor confidence and the pivotal role of mutual funds in wealth creation. As we step into 2025, these trends set a strong foundation for sustained growth, fostering financial inclusion and helping millions of investors achieve their financial aspirations.
