What AMFI’s December 2022 data says about mutual funds and what should investors do in 2023

AMFI December 2022 Data: Mid Cap, Small Cap, Index Funds and Exchange Traded Funds other than Gold ETFs were among the top mutual fund categories that witnessed the highest inflows in December 2022. The month also witnessed a reversal of inflows and outflows compared to November.

“In the month of November, we saw net inflows in Debt schemes and Equity schemes witnessed outflows. This trend got reversed in the month of December with Debt schemes witnessing net outflows of Rs 21,946 crores (of which liquid funds saw outflows of Rs 13,852 crores) and Equity schemes witnessed inflows of Rs 7,303 crores,” said Viraj Gandhi, CEO, of Samco Mutual Fund.

According to AMFI’s December 2022 data, mid and small-cap funds witnessed a lot of investor interest during the month attracting the highest flows amongst Equity inflows. Experts say that this could have been due to the relative underperformance of mid and small-cap stocks in previous months, leading to attractive valuations, whereas Large Cap funds again witnessed marginal outflow on monthly basis.

Also Read: AMFI November 2022 data highlights

The month of December also witnessed increased investments in SIP. “The highlight of the month was SIP book gaining more momentum with a monthly inflow of Rs 13,573 crores against the inflows of Rs 13,307 crores in the month of November,” said Gandhi.

Flavour of the Month: Hybrid schemes

Hybrid schemes saw a net inflow of Rs 2,255 crores in December with multi-asset allocation fund contributing Rs 1,711 crore of it. Among other categories of funds, Balance Advantage Funds (BAFs) saw an outflow of Rs 413 crore, while ETFs attracted healthy flows of Rs 15,398 crores.

“The flavour of the month from the Hybrid schemes was the multi-asset allocation category with net inflows of Rs.1,711 crore, followed by Arbitrage fund inflows at Rs.883 crore,” said Gopal Kavalireddi, Head of Research at FYERS.

Also Read: How to avoid sleepless nights due to volatile stock markets in 2023: Two tips

For the calendar year 2022, the total net flows into all mutual funds stood at Rs 71,443 crore, with positive inflows into equity schemes (Rs 1.61 lakh crore), Index funds and ETFs (Rs 1.65 lakh crore) and negative inflows into debt schemes (Rs 2.5 lakh crore) collectively from the open and closed-ended categories. During the calendar year, SIP inflows averaged more than Rs.12,500 crore per month, helping investors to stay in the stock market and benefit from Rupee cost averaging.

Mutual Fund schemes with highest inflows in December 2022

  • Multi Cap Fund: Rs 676.14 crore
  • Large & Mid Cap Fund: Rs 1,189.50 crore
  • Mid Cap Fund: Rs 1,962.26 crore
  • Small Cap Fund: Rs 2,244.77 crore
  • Value Fund/Contra Fund: Rs 648.06 crore ELSS: Rs 564.06 crore
  • Flexi Cap Fund: Rs 403.50 crore
  • Multi Asset Allocation Fund: Rs 1711.42 crore
  • Arbitrage Fund: Rs 883.29 crore
  • Index Funds: Rs 6736.52 crore
  • Other ETFs: Rs 8788.45 crore
  • Fixed Term Plan: Rs 1214.51 crore

Also Read: Best Small Cap Funds (January 2023): Top 10 Schemes

Year of price and time consolidation What to do next

According to Kavalireddi, 2022 was the year of time and price consolidation. Therefore returns from many funds may be low. However, investors should remain disciplined and continue with their investments.

Assets under Management (AUM) by end of December 2022 stood at Rs 39.88 lakh crore, an increase of 5.7% in CY22. He said that this low change can be attributed to uncertainty in stock markets, and changing interest rate scenarios affecting the business environment at large. “Understandably, investors have been in step with these changes by reallocating their investments between equity, debt and hybrid schemes.”

“2022 has been a year of price and time consolidation for stock markets; hence, the returns for many mutual funds would be subdued and even negative. However, investors need to remain disciplined and continue with their investments in a systematic manner. The current environment provides excellent entry points for passive and active investors to get excellent returns over the next three to five years,” said Kavalireddi.

(Disclaimer: Views expressed above are the personal opinions of the respective commentators. Mutual fund investments are subject to market risks. Please consult your financial advisor before investing)