MF’s Equity Buying On Record High; Hydrid Mutual Fund Schemes Contributed

Crossing 4 million for the first time, Mutual Fund’s equity buying has doubled in 2024. This significant surge follows two consecutive years of investments exceeding Rs 1.5 trillion.

Record inflow and hybrid mutual fund schemes have stimulated the surge in equity buying by mutual funds. Moreover, MFs have grown stronger on the back of persistent systematic investment plan (SIP) inflow.

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Notably, the strong equity buying on MFs has added to the market’s strength amid heightened selling of FII.

As of November, active equity schemes had raked in Rs 0.5 trillion from investors in 2024. In comparison, the inflows stood at Rs 1.6 trillion in the whole of 2023.

“Domestic institutional investors (DII) were strong buyers in the equity secondary market while foreign portfolio investors (FPIs) turned net buyers at the margin. Monthly SIP flows in MFs continue to see secular growth and crossed Rs 25,000 crore in October 2024. Notably, MFs contributed around 80 per cent of net flows by DIIs in 2024,” Mirae Asset MF stated in a report
The surging MF inflows have also allowed the market to absorb record issuances of fresh equity last year.

“The year 2024 witnessed record primary issuances (Rs 3.4 trillion). We may see this momentum going into 2025 and may keep up with the demand, given the strong pipeline,” the report added.