The sector and thematic fund category is now the largest active mutual fund (MF) category, with assets under management (AUM) more than doubling in the past year. The category, considered the riskiest of all MF offerings as its fortunes are tied to a single sector or theme, has seen its AUM grow to Rs 4.21 trillion at the end of July, from just Rs 2 trillion in July 2023.
The strong increase in assets under management, supported by robust revenues from new fund launches and strong inflows into existing offerings, saw the fund category rise from fourth place a year ago to number one in the AUM rankings.
Flexicap funds, which held the leading position until June, follow closely behind.
Meanwhile, the midcap category, the second-largest AUM gainer in absolute terms over the past year, has outpaced largecap funds. AUM stood at Rs 3.8 trillion in July, against Rs 3.6 trillion managed by largecap funds.
Small-cap funds remain in fifth place despite a 72 percent growth in assets under management.
The past year has been marked by disproportionate inflows into a select few categories. Small-cap and mid-cap funds were the lion’s share until a few months ago, but momentum has shifted to thematic funds in recent months on the back of a strong new fund offering (NFO) line-up.
In May, HDFC MF’s manufacturing fund raised Rs 9,563 crore. In June, nine new offerings raised Rs 12,974 crore. Last month, two NFOs that closed together raised Rs 9,790 crore.
| Changing preferences: riskier offers on the rise | ||
| Fund category | AUM* (Rs trillion) | YoY growth (%) |
| Sectoral/Thematic | 4.2 | 104 |
| Flexi cap | 4.2 | 50 |
| Medium hood | 3.8 | 65 |
| Big cap | 3.6 | 36 |
| Small capitalization | 3.1 | 72 |
| Large and medium cap | 2.6 | 65 |
| ELSS | 2.5 | 41 |
| Value/against | 1.9 | 67 |
| Multiple caps | 1.7 | 98 |
| Focused | 1.5 | 31 |
| Dividend yield | 0.3 | 77 |
| Total | 29.3 | 61 |
| Source: Amfi | ||
First publication: Aug 19, 2024 | 6:22 PM IST