The steep fall in the equity indices has not deterred mutual fund investors, as they have continued to invest through systematic investments plans (SIPs) in January. Even mid- and small-cap funds have seen record inflows, according to the latest data released by the Association of Mutual Funds in India (Amfi).
Interestingly, there has been a sharp rise in inflows into safer schemes such as large-caps, gold exchange traded funds (ETFs) and debt funds.
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Inflows into SIPs remained robust at Rs 26,400 crore, reflecting only a marginal decline from December’s record high of Rs 26,459 crore.
Inflows in large cap funds saw a 52% month-on-month growth to Rs 3,063.33 crore and debt funds witnessed an inflow of Rs 1.29 lakh crore, compared with an outflow of Rs 1.27 lakh crore in December. Gold ETFs received inflows of more than Rs 3,751 crore.
With the financial year nearing to its end, investors thronged to equity-linked savings schemes (ELSS), with inflows rising 323% – from Rs 188 crore in December 2024 to Rs 797 crore in January 2025, as many in the old tax regime would have wanted to take advantage of benefits of Section 80C.
At the same time, despite concerns over valuations, inflows into small- and mid-cap funds touched new records of Rs 5,720.87 crore and Rs 5,147.87 crore, respectively. Inflows into small-cap funds saw a 22.6% increase from December while those in midcaps gained 1.1%. In January, total mutual fund assets under management stood at Rs 67.25 lakh crore.
However, flows into sectoral and thematic funds fell by 41% to Rs 9,017 crore. Overall, inflows in equity mutual funds fell 3.6% from December to Rs 39,688 crore.
According to Sandeep Bagla, CEO of TRUST Mutual Fund, investors are advised to take higher risks when the market falls. “We are seeing more investment coming into mutual funds and the industry’s investment time horizon is also increasing.” The negative impact of caution around small- and mid-cap valuation comes with a lag and it will be better to see January and March numbers, he said.
Jatinder Pal Singh, CEO, ITI Mutual Fund, said: “Volatility in the Indian equity markets,
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