What is Core & Satellite strategy?

Thematic or sectoral funds seem to be favourites of retail investors. This particular category of mutual fund has received maximum inflows in last one year or so. According to Association of Mutual Funds in India (Amfi) data, in February 2024 too, thematic funds garnered highest inflows as compared to all other category of equity funds by retail investors. Apparently, thematic funds have got highest ever monthly inflows in February 2024.

The net inflows in thematic funds has jumped almost three times to Rs 11,262.72 crore in February 2024 from Rs 3,855.90 crore in year ago month.

During the same period, net inflows in equity funds jumped 71 per cent to Rs 26,865.78 crore in February 2024 from Rs 15,685.57 crore in February 2023.

And, net AUM of sectoral funds has jumped 70 per cent year-on-year (YoY) to Rs 2.87 lakh crore in the current calendar year’s second month from Rs 1.68 lakh crore in February 2023.

While, that of equity category has a whole has apmlified 54 per cent to Rs 23.12 lakh crore in February 2024 from Rs 15.01 lakh crore in year ago month.

As of February 29, 2024, the net AUM of thematic funds constituted 12 per cent of net AUM of all equity funds in the industry.

After Covid-19 pandemic saga, new retail investors which came into the market,  have been so bullish on equities that, investment in equity mutual funds has been positive continuously since March 2021. Since then, not a single month has gone by where net-outflow of funds from equity mutual funds was witnessed.

Sensing strong retail participation in sectoral funds, Asset Management Companies (AMCs) have also launched highest nuber of schemes in this particulat category than in any other equity fund category as of February 29, 2024. So far, there are 155 number of thematic mutual fund schemes. Total number of equity scemes stand at 435. Thematic fund schemes constitute 35 per cent of total equity mutual fund schemes in the country.

Afte small cap funds, retail investors have opened highest number of folios in thematic funds. As of February 29, 2024 there are 1.74 crore folios in sectoral funds. This constitutes 14 per cent of total equity folios in the industry. There are total of 12 crore folios in the equity mutual fund category.