Thanks to the buoyancy in systematic investment plans, the net inflows into equity mutual funds have jumped 25 per cent in the financial year ended March 2024 to ₹1.86 lakh crore against ₹1.49 lakh crore in the same period last year even as concern on high market valuation continue to prevail.

Investment in hybrid schemes has turned positive to ₹1.47 lakh crore against an outflow of ₹16,790 crore logged in the last fiscal while outflow from debt funds moderated to ₹21,073 crore (₹1.81 lakh crore), according the Association of Mutual Funds in India data.

Interestingly, the inflows through small and mid-cap, at ₹62,805 crore last fiscal, alone account for 34 per cent of the overall equity investments.

Anand Vardarajan, Business Head – Alternate Products and Product Strategy, Tata Asset Management said the inflows into equity schemes was largely led by small and mid-cap schemes, but going ahead it may moderate given the cautionary statement coming from several quarters with respect to valuation which is already reflected in the data released for last month.

Moreover, many fund houses including Tata MF have restricted inflows into small-cap funds to protect investors’ interests. Besides SEBI has directed MFs to conduct stress test on a regular basis, he said.

On the positive side, he added the money slated for investment in small- and mid-cap are flowing into large and flexi-cap funds which should see steady inflows through SIP.

Given the equity investment frenzy, inflows into hybrid also turned positive to ₹1.47 lakh crore against a net outflow of ₹16,970 crore in FY’23.

It was a clean washout for debt fund investment as it registered an outflow of ₹21,073 crore last fiscal against a net outflow of ₹1.81 lakh crore.

Inflows through SIP was up 28 per cent last fiscal to ₹1.99 lakh crore against ₹1.56 lakh crore in FY’23.

Deven Mistry, Research Analyst, Motilal Oswal Financial Services, said the overall MF industry’s total AUM jumped 35 per cent last fiscal to ₹53.4 lakh crore propelled by growth in equity, other ETFs, arbitrage funds and liquid funds.

The Nifty exited FY’24 on a high note with a 29 per cent return against a fall of one per cent in FY’23 despite weak global macros, high interest rates and geopolitical uncertainties that kept global markets volatile and jittery, he said.

“The Indian markets continued to showcase their resilience and outperformed other emerging markets handsomely. MSCI India outperformed global markets by a wide margin in the past 12 months,” he added.