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ICICI Pru, HDFC MF top inflow charts; large-cap funds lap up most money in Q3 of FY24

ICICI Pru, HDFC MF top inflow charts; large-cap funds lap up most money in Q3 of FY24

The mutual fund industry in the third quarter of fiscal 2023-24 sustained the positive momentum observed in the preceding quarters, with significant net inflows of ₹ 64,613 crore in open-end mutual funds.

This marked a substantial increase from the previous quarter’s ₹34,765 crore.

Top AMCs like
ICICI Prudential
and HDFC Mutual Fund continued to dominate the inflow charts with inflows worth ₹14,173 crore and ₹11,169 crore respectively. However, fund houses like Axis Mutual Fund and PGIM India saw outflows.

According to the Morningstar domestic fund flow report,
the positive trend was broadly spread across most asset classes, except for the fixed-income segment, which faced challenges.

Large-cap funds experienced a positive turnaround with net inflows of ₹750 crore in the third quarter of fiscal 2023-24, breaking a streak of two consecutive quarters of net outflows. However, the category concluded the quarter with net outflows of ₹281 crore in December 2023, presenting a muted finish.

Passive fixed-income index funds/target-maturity funds faced challenges during the quarter, witnessing net outflows of ₹4,170 crore. Currently, there are approximately 116 such funds, including 25 fixed-income ETFs.

The muted flows in this category were attributed to changes in tax laws for fiscal 2023-24, eliminating the indexation benefit. Investors rushed to avail themselves of this benefit in the March 2023 quarter before the financial year-end, causing a spike in inflows.

Closed-end fund categories, including fixed-income, growth, and interval categories, demonstrated resilience during the quarter, recording net inflows of ₹846.3 crore.

Despite the overall positive trend, open-end funds experienced fluctuating net flows throughout the quarter. October 2023 commenced with strong net inflows of ₹80,586 crore, followed by a dip to ₹26,787 crore in November 2023. The quarter concluded on a disappointing note with ₹42,760 crore of net outflows in December 2023.

The quarter witnessed a historic milestone as the total open-end
assets under management (AUM)
for the industry surpassed the ₹50,00,000 crore mark for the first time. The AUM stood at ₹50,48,334 crore as of December 2023, reflecting a notable 9% increase since the previous quarter. This achievement was attributed to a combination of favorable market conditions and net inflows.

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