Record-breaking Q1 inflows for Indian mutual funds: Here's what happened
Open-ended mutual funds in India experienced their highest net inflows in four years during the first quarter of FY2024, reaching around Rs. 1.85 lakh crore. Fixed-income funds led the way with Rs. 1.39 lakh crore, while equity funds saw a significant drop to Rs. 18,358 crore. In the first half of 2023, 31 of the 40 index funds launched were fixed-income ones.
Fixed-income funds saw net inflows after 6 quarters
After six disappointing quarters, fixed-income funds finally saw net inflows, with only four out of 16 categories experiencing outflows. The increase in inflows in this segment could be related to the change in tax laws of fixed-income mutual funds for 2023-24. They won't have the indexation benefit (adjustment in the asset's value as per the inflation level) offered to investors.
Net inflows of open-ended funds saw a steady decline
Despite the uptick in inflows, the net inflow of open-ended funds saw a steady decline in the June quarter. It went from Rs. 1,23,613 crore in April to Rs. 59,879 crore in May and Rs. 1,295 crore in June. Meanwhile, in the first quarter, the small-cap category recorded its highest-ever net inflows of Rs. 10,937 crore.
