Topic 6: MUTUAL FUND: GOOD SCORE

Equity inflows fell 19% MoM to ₹24,690 crore in October but rebounded late November with Nifty's 1.87% gain; AUM approached ₹80 trillion, folios hit 23.8 crore, and gold/silver ETFs recorded YTD ₹276bn inflows. Top schemes like Nippon India Large Cap (9.88% 1Y) outperformed amid FII. Funds pivoted to ultra-short debt amid RBI rate uncertainty and fiscal deficit at 52.6% of target, cutting long-duration bets as yields stayed above 6.5%.

SEBI proposed eliminating the additional 5 bps charge on schemes (transitory exit load offset, reduced from 2018), rationalizing TER definitions excluding statutory levies, and capping brokerage to enhance unitholder costs. Reforms tightened fund overlaps (value/contra ≤50% portfolio), mandated 75% equity in equity funds (up from 65%), permitted sectoral debt schemes (≤60% overlap), and expanded REITs/InvITs/residuals. hybrids/arbitrage New AMC framework emphasized digital disclosures, 30-day rebalancing for passive deviations, up to 6 goal-based target date funds (3/5/10Y lock-ins), and stricter replication rules. India’s mutual fund industry AUM reached a record ₹79.9 lakh crore (up from ₹75.6 lakh crore in September), propelled by mark-to-market gains and robust retail participation despite moderated equity inflows.

Equity-oriented schemes attracted ₹24,690 crore net inflows—the 56th consecutive positive month—but declined 19% MoM from ₹30,422 crore, signalling caution amid volatility; flexi-cap led at ₹8,929 crore, while large-cap fell to ₹972 crore, mid-cap dropped 25% to ₹3,807 crore, and small-cap eased 20% to ₹3,476 crore. Debt funds surged with ₹1.56 lakh crore inflows, hybrids added ₹14,156 crore (arbitrage ₹6,920 crore dominant), and gold ETFs shone at ₹7,743 crore, reflecting safe-haven shifts. SIPs hit a second straight record at ₹29,529 crore (+0.57% MoM) from 9.45 crore accounts, with AUM at ₹16.25 lakh crore (20.3% of industry total). New fund offers (18 open-ended schemes) mobilized ₹6,062 crore, including ₹4,173 crore from equity; folios rose to 25.6 crore. Four Specialized Investment Funds (SIFs) debuted, garnering ₹2,005 crore AUM by month-end. Overall, growth underscored SIP resilience and diversification amid FII outflows. After December 5th , RBI’s 25 bps repo rate cut to 5.25% (125 bps in 2025) signals continued monetary easing amid low inflation, strengthening investor confidence. target, cutting long-duration bets as yields stayed above 6.5%.

SEBI proposed eliminating the additional 5 bps charge on schemes (transitory exit load offset, reduced from 2018), rationalizing TER definitions excluding statutory levies, and capping brokerage to enhance unitholder costs. Reforms tightened fund overlaps (value/contra ≤ 50% portfolio), mandated 75% equity in equity funds (up from 65%), permitted sectoral debt schemes (≤60% overlap), and expanded hybrids/arbitrage to REITs/InvITs/residuals. New AMC framework emphasized digital disclosures, 30-day rebalancing for passive deviations, up to 6 goal-based target date funds (3/5/10Y lock-ins), and stricter replication rules. India’s mutual fund industry AUM reached a record ₹79.9 lakh crore (up from ₹75.6 lakh crore in September), to propelled by mark-to-market gains and robust retail participation despite moderated equity inflows.

Equity-oriented schemes attracted ₹24,690 crore net inflows—the 56th consecutive positive month—but declined 19% MoM from ₹30,422 crore, signalling caution amid volatility; flexi-cap led at ₹8,929 crore, while large-cap fell to ₹972 crore, mid-cap dropped 25% to ₹3,807 crore, and small-cap eased 20% to ₹3,476 crore. Debt funds surged with ₹1.56 lakh crore inflows, hybrids added ₹14,156 crore (arbitrage ₹6,920 crore dominant), and gold ETFs shone at ₹7,743 crore, reflecting safe-haven shifts. SIPs hit a second straight record at ₹29,529 crore (+0.57% MoM) from 9.45 crore accounts, with AUM at ₹16.25 lakh crore (20.3% of industry total). New fund offers (18 open-ended schemes) mobilized ₹6,062 crore, including ₹4,173 crore from equity; folios rose to 25.6 crore. Four Specialized Investment Funds (SIFs) debuted, garnering ₹2,005 crore AUM by month-end. Overall, growth underscored SIP resilience and diversification amid FII outflows.

After December 5th , RBI’s 25 bps repo rate cut to 5.25% (125 bps in 2025) signals continued monetary easing amid low inflation, strengthening investor confidence. SIPs remain resilient at a record ₹29,529 crore from 9.45 crore accounts and may exceed ₹30,000 crore in December, supported by 7.3% GDP growth. Lower borrowing costs are boosting banking, auto, and realty stocks, improving long-term equity returns despite FPI outflows, which DIIs continue to absorb. Debt funds may see strong inflows as yields soften, while hybrid funds and gold ETFs retain appeal. Overall mutual fund AUM could cross ₹82 trillion by month-end.



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