Mutual funds continue to be a major driver of the Indian financial markets. In March 2024, monthly SIP contribution continued its steady rise reaching ₹19,271 crore. While debt funds witnessed an outflow of over ₹2-lakh crore, equity inflows continue to be strong (monthly average for the last six months is more than ₹20,000 crore). Among equity funds, the most notable shift was from small-cap funds to large-cap funds. In FY24, the value of mutual fund holdings in capital goods, power and metals doubled. In recent times, the value of mutual fund holdings in IT witnessed the highest decline of 6 per cent month-on-month.

Even though equity fund inflows declined 15 per cent m-o-m in March‘24, it was still strong at ₹22,576 crore. Debt oriented schemes witnessed a huge outflow of over ₹2-lakh crore.

Recent regulatory action impacted flows to small-cap funds, turning negative for the first time in 2.5 years. At the same, flows to large-cap funds more than doubled m-o-m and stood at ₹2,128 crore.

The value of mutual fund holdings in capital goods, power and metals more than doubled during FY24. In March 2024, the value of mutual fund holdings in IT declined 6 per cent m-o-m, the only major sector to witness a decline.

Monthly SIP contributions have been on a steady rise. For FY24, the cumulative contribution stood at ₹2-lakh crore, 28 per cent higher on a year-on-year basis. In Q4, the growth rate was higher at 37 per cent y-o-y.

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