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Small investors are investing heavily in thematic and small cap funds.
Retail investors opened record number of 40 lakh mutual fund accounts in the month of December 2023. This is the highest number of SIP accounts that has been opened in any single month in India’s history. The aggregate tally of mutual fund accounts has reached all time high levels of 7.63 crore in the country. Out of this, 37 per cent of folios were opened in the current financial year 2023-24 (FY24), itself i.e. from April 1, 2023 to December 31, 2023. Individual investors have opened 2.83 crore SIP accounts, hitherto, in the ongoing fiscal.
So which are the favourite mutual funds of retail investors?
Small investors are investing heavily in thematic and small cap funds. These two mutual fund categories have attracted maximum SIP inflows hitherto in FY24. Small cap funds saw maximum inflows of Rs 34,103.29 crore. While, thematic funds garnered second highest inflows of Rs 22,152.72 crore so far in the ongoing current financial year.
As a result, net AUMs of these two categories have ballooned just too much!
In December 2023, the net AUM of thematic funds ballooned 45 per cent to Rs 2.58 lakh crore from Rs 1.78 lakh crore in the first month of the current fiscal i.e. in April 2023. While, that of small cap funds have zoomed 64 per cent to Rs 2.33 lakh crore in December 2023 from Rs 1.42 lakh crore in April 2023.
This shows how retail investors in India have become so bullish on small cap stocks. They have high hopes from small cap companies. They are investing thick and fast in high risk small cap mutual funds.
While, the total AUM of India’s mutual fund industry also crossed Rs 50 lakh crore in the same month.