Equity mutual funds’ AUM grows for 11th consecutive year, net inflows surge over 100% in CY24: Motilal Oswal

The domestic mutual fund (MF) industry achieved remarkable milestones in CY24, with equity assets under management (AUM) witnessing growth for the 11th consecutive year, according to Motilal Oswal’s Fund Folio Report. The total equity AUM rose by 40 per cent year-on-year (YoY) to ₹33.4 trillion, driven by robust market performance and increased equity scheme sales.

Equity AUM Growth and Record Net Inflows

MOSL highlighted that the Nifty rose 9 per cent YoY, boosting AUM growth alongside equity scheme sales, which soared by 69 per cent YoY to ₹9,120 billion. Despite a 40 per cent rise in redemptions to ₹4,645 billion, net inflows more than doubled YoY to ₹4,475 billion in CY24, setting an all-time high compared to ₹2,063 billion in CY23.

The MF industry’s total AUM surged 32 per cent YoY, reaching ₹66.9 trillion. Growth was particularly strong in equity funds (+ ₹9,537 billion), liquid funds (+ ₹1,727 billion), and balanced funds (+ ₹1,533 billion).

SIP Contributions at Record Highs

According to MOSL, investor confidence remained robust, as evidenced by systematic investment plan (SIP) contributions reaching a record ₹264.6 billion in December 2024, up 4.5 per cent month-on-month (MoM) and 50.2 per cent YoY. This underscores the growing retail participation in mutual funds.

December 2024 Trends: AUM Declines Marginally

Total MF industry AUM fell by 1.7 per cent MoM to ₹66.9 trillion in December 2024, MOSL reported. This decline was largely attributed to reductions in liquid funds (- ₹882 billion), income funds (- ₹298 billion), and other ETFs (- ₹204 billion). Conversely, equity fund AUM rose by ₹235 billion MoM, supported by a 16.3 per cent increase in equity scheme sales despite a 2 per cent decline in the Nifty-50.

Equity Investments by Fund Houses

The top 20 asset management companies (AMCs) collectively reported flat MoM equity value in December 2024, though it grew 36.1 per cent YoY. Among the top 10 AMCs, DSP Mutual Fund, Axis Mutual Fund, and ICICI Prudential Mutual Fund showed marginal MoM gains, MOSL noted.

Sectoral Preferences and Allocations

MOSL revealed that mutual funds increased their weightage in Healthcare, Retail, Consumer Durables, Technology, and Real Estate sectors in December 2024. Private Banks (16.6 per cent) remained the top sector holding, followed by Technology (9.4 per cent) and Automobiles (8.2 per cent).

Under-owned sectors included Consumer, Oil & Gas, and Private Banks, while Healthcare, Capital Goods, and Consumer Durables were over-owned compared to their representation in the BSE 200 index.

Stock-Specific Trends

MOSL highlighted significant net buying by MFs in December 2024 in Cipla (+10.6 per cent), SBI Life Insurance (+7.1 per cent), and IndusInd Bank (+5.7 per cent) from the large-cap space. In the midcap segment, Yes Bank, HUDCO, and Tata Elxsi attracted notable interest, while small-cap stocks such as Signature Global and Mahanagar Gas witnessed substantial buying.

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