Hybrid mutual funds witness inflows worth ₹1.45 lakh crore
The fiscal year 2023-24 has marked a significant revival in hybrid mutual fund schemes, attracting an impressive ₹1.45 lakh crore in investments. This resurgence was primarily fueled by considerable inflows into the arbitrage category, reversing the trend of withdrawals seen in the previous fiscal year. The increase in assets was paralleled by a rise in investors, with folio numbers climbing to 1.35 crore in March 2024, from 1.21 crore a year earlier, indicating an expanded investor base of 14 lakh.
Taxation changes boost investments
Hybrid funds, which typically invest in a mix of debt and equity securities, and occasionally other asset categories like gold, have been consistently attracting inflows since the start of the financial year 2023-24 in April. This trend followed a change in taxation for debt funds that began in the same month. Prior to this shift, the segment experienced a net withdrawal of ₹12,372 crore in March.
FY24 sees significant inflows in diverse asset classes
Data from the Association of Mutual Funds in India (AMFI) reveals that the hybrid category witnessed net inflows of ₹1.45 lakh crore in FY24, compared to an outflow of ₹18,813 crore in FY23. Out of ₹1.45 lakh crore, substantial inflows of ₹90,846 crore were observed in the arbitrage category. Meanwhile, over ₹33,000 crore was directed toward multi-asset allocation, ₹10,765 crore into balanced advantage funds, and ₹10,327 crore toward equity savings funds, according to the data.
Hybrid funds' assets under management soar in FY24
The substantial inflow into hybrid funds has significantly boosted the assets under management (AUM) of the category. The AUM rose to ₹7.2 lakh crore as of March 2024, from ₹4.8 lakh crore in FY23, marking a 51% increase. Hybrid funds are particularly appealing to investors with a low/moderate risk profile, as they lower the volatility associated with equity markets, while providing stability in the fixed-income market.
