October AMFI Data Key Trends: All equity fund categories see net inflows, gold ETFs & small caps stars of the show

G. Pradeepkumar, CEO, Union Mutual Fund said, "Equity fund inflows remained strong in October, with a notable reduction in redemptions of 15% compared to September. The 2.84% drop in Nifty 50 during October may have contributed to the lower redemption rates."

The most significant shift was witnessed in the large-cap category, which witnessed a turnaround. After six months of outflows, large-cap funds saw inflows of ₹724 crore in October, indicating renewed investor faith in established companies.

The small-cap funds have been making headlines lately with a remarkable surge in investments. According to AMFI data, these funds received an inflow of ₹4,495 crore in October, a substantial increase from the previous month's ₹2,678 crore. The small-cap category's average assets under management (AAUM) also exceeded ₹2 lakh crore for the first time, underlining the growing interest in this segment of the market.

"Small Cap category continues to attract flows. The correction last month provided some opportunities for clients to look at this category with renewed enthusiasm," said Anand Vardarajan, Business Head, Institutional Clients, Banking, Alternate investments & Product Strategy at Tata Asset Management.

The Systematic Investment Plan (SIP) contributions since the start of financial year 2024 have surpassed the significant milestone of ₹1 lakh crore, according to AMFI. If we look at October's monthly figures, the contributions reached ₹16,928 crore, in contrast to the ₹16,420.06 crore reported in September.

Debt-oriented funds have experienced a substantial shift in investor sentiment in October. After two consecutive months of net outflows, these funds rebounded with inflows of ₹42,634 crore, compared to outflows of the same amount in September.

The quantum of net flows in gold ETFs rose to ₹841 crore in October from ₹175 crore it received in September.

"With ongoing geopolitical tensions, fear of continued hike in interest rates in the US, inflation still higher than expectations, and growth rate slowing down, the appeal of gold as a safe haven and hedge against inflation is expected to continue. Moreover, gold prices in the recent times have come-off from its all-time high levels, thereby providing some buying opportunity, particularly after a sharp rally it witnessed since March this year," said Melvyn Santarita, Analyst, Manager Research, Morningstar Investment Adviser India.