Finance Desk – March 2023 witnessed some notable shifts in India’s mutual fund landscape, particularly affecting smallcap and midcap funds.
For the first time in two and a half years, smallcap mutual funds experienced net outflows. Specifically, these funds saw a withdrawal of Rs 94 crore. This change follows a period of rising concern from the Securities and Exchange Board of India (SEBI).
Midcap funds inflows dropping dramatically by 44 percent to Rs 1,018 crore.
SEBI’s recent instructions for mutual funds to conduct thorough reviews of their small and midcap holdings for liquidity and volatility likely contributed to this cautious stance from investors.
Whereas, largecap funds experienced a significant resurgence. Inflows into largecap funds jumped by 131 percent to Rs 2,128 crore in March.
Despite the shifts in fund inflows, investments through Systematic Investment Plans (SIPs) remained robust. SIP contributions stayed above Rs 19,000 crore for the second consecutive month.
The debt fund category saw substantial net outflows nearing Rs 2 lakh crore, with liquid funds and ultra-short duration funds experiencing the most significant withdrawals.
Hybrid schemes and new fund offerings (NFOs) didn’t fare as well either. Hybrid schemes’ inflows plummeted by 69 percent to Rs 5,584 crore, and NFOs only raised Rs 4,146 crore, a downturn from previous months.
However, not all was gloomy. Certain categories like Long Duration Funds, Banking and PSU Funds, and Gilt Funds with a 10-year constant duration continued to attract inflows.
(Image/Pixabay)
