Key trends from September's AMFI data: Equity resilience, gold ETF fluctuations and more

Ashwini Kumar, Head, Market Data at ICRA Analytics, said equity-oriented schemes continued to witness a strong uptick in demand backed by a sense of optimism around India’s economic growth prospects.

"FII inflows, too, have led to rise, including comparative economic factors around the globe," he said.

Debt funds faced a substantial outflow of approximately ₹1 lakh crore, marking the highest in the last six months. This suggests a significant shift in the risk perspective of both institutional and individual investors. Total assets under management (AUM) for debt funds declined significantly.

Hybrid funds, which offer a mix of equity and debt, witnessed substantial inflows, indicating a growing preference for balanced portfolios.

"This move towards aggressive risk allocation is evident in the heavy outflow from debt funds, particularly pure debt funds, while hybrid funds experience a windfall of inflows. Investors are increasingly favouring dynamic asset allocation over traditional pure debt funds," said Kislay Upadhyay, smallcase manager, and Founder of FidelFolio Investments.

Small investors continued to show a strong inclination towards small-cap funds, with the number of folios increasing by 6% month-on-month (MoM). This marks the fourth consecutive rise in the number of folios for small-cap funds. Larger investors, on the other hand, adopted a risk-off approach, with net inflows being higher in sectoral funds alone.

"Broad market indices, including Nifty 50, reached new all-time highs, with the Nifty 50 crossing the 20,000 mark for the first time ever. The Nifty Midcap 150 and Nifty Smallcap 250 indices outperformed large-cap indices, indicating robust performance in the mid- and small-cap segments. Consequently, mid- and small-cap funds received substantial net inflows, while large-cap funds experienced slower net outflows," Viraj Gandhi, CEO of SAMCO Mutual Fund said.

The power of systematic investment plans (SIPs) remained evident, with continued growth to ₹16,402 crore, up from ₹15,814 crore in the previous month. This indicates that investors have embraced the benefits of systematic investment and are likely to continue this strategy.

The quantum of net flows in Gold ETFs fell to ₹ 175.29 crore in September from ₹ 1,028.06 crore in August. However, the appeal of gold as a safe haven and hedge against inflation is expected to continue due to ongoing interest rate hikes in the US and economic uncertainties, said Melvyn Santarita, Analyst, Manager Research at Morningstar Investment Adviser India.

A total of 16 new fund offers (NFOs) were launched in September, with five hybrid categories garnering ₹5,233 crore, followed by six equity-oriented schemes with ₹2,503 crore and ₹59 crore in other schemes.