Mutual fund houses garnered ₹14,370 crore via equity NFOs in June: Report

Mutual fund: With a total of 11 equity new fund offers, particularly the thematic schemes, helped mutual fund houses garner ₹14,370 crore, the highest ever attained by NFOs, reported Business Standard .

This is higher than the previous high of July 2021, when four new fund offers accumulated around ₹13,709 crore, with ICICI Prudential MF’s flexicap NFO alone mobilising ₹9,808 crore.

In the first half of 2024, mutual funds rolled out 30 active equity schemes, as compared to 51 in the entire 2023. Besides, NFO collections by active equity schemes in 2024 have outpaced the 2023 total, with equity NFOs raking in ~37,885 crore by June, surpassing the ~36,657 crore collected during the previous year.

In 2022, 27 new fund launches had garnered ₹29,586 crore.

Experts attribute the uptick in NFO launches and collections to buoyant market conditions, noting that equity fund launches typically flourish during bullish phases. June was the first month in at least five years when more than 10 active equity fund launches completed their NFO period.

Thematic funds

However, the spike in thematic NFOs, the highest-risk category in mutual funds, has induced industry leaders to call for caution.

Neil Parikh, chairman and CEO of PPFAS Mutual Fund, expressed his concerns via social media, stating: “Wow, the sheer number of NFOs launched, especially thematic funds, is a bit scary… be careful, guys.”

The culmination of the Lok Sabha elections and a continued market upswing have fuelled the momentum for NFOs in both active and passive equity spaces.

Additionally, inflows into equity mutual funds rose to ₹40,608 crore in June as against ₹34,697 crore in May, reporting an increase of 17 percent, the Association of Mutual Funds in India (AMFI) data revealed. Consequently, total assets under management (AUMs) of equity mutual funds hit around ₹27.68 lakh crore as on June 30, 2024. The corresponding data at May 31 stood at ₹25.39 lakh crore.

Contribution via systematic investment plans (SIPs) touched ₹21,262 crore as compard to ₹20,904 crore in May