Mutual fund redemptions increased 39% year-on-year to Rs 332,300 crore in CY23 leading to a decline in net inflows to Rs 206,300 in the year from Rs 238,300 in CY22, a Motilal Oswal report said.
On a month-on-month basis, the pace of redemptions spiked by 48.9% to reach Rs 38,900 crore in December taking net inflows to Rs 17,700 crore during the month. It was a marginal uptick from Rs 16,900 crore in November 2023.
Notwithstanding the trend, the domestic MFs’ equity asset under management (AUM) rose for the 10th consecutive year to reach Rs 23.8 lakh crore, which was up 43% YoY in CY23. The rise in AUM was fuelled by an uptrend in the domestic markets where headline index Nifty gained over +20% YoY. It was also supported by higher equity scheme sales at Rs 538,600, which was up 13% YoY.
Equity AUM for domestic MFs, including ELSS and index funds, increased 6.9% MoM to Rs 23.8 lakh crore in December 2023. While the December leap by Nifty was 7.9% MoM, the increase in sales of equity schemes was higher by 31.6% MoM to Rs 56,500 crore.
The domestic cyclicals saw their weight go down by 110 bps in CY23 pulled down by BFSI, chemicals, textiles and retail. While retail, textiles and insurance were down 0.1%, chemicals and private banks’ weights were down by 0.4% and 0.8%, respectively. As for PSU banks and NBFCs, the decline was in the excess of 100 bps.
Defensives saw their weights go up by 120 bps in CY23 led by utilities (1.1%), healthcare (0.6%) and telecom (0.1%). Meanwhile, consumer and technology fell 0.2% and 0.3% respectively, the Motilal Oswal report said.
MFs were net buyers in 52% of the stocks in Nifty50 while they bought 65% of the stocks in Nifty Midcap 100, 64% of the stocks in Nifty Smallcap 100.
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