NFO equity inflows surge 54.1% in June 2024 as AMCs launch thematic and sectoral funds

As more retail investors chant the ‘mutual fund sahi hai’ mantra, asset management companies are trying to cash in on the enthusiasm through offbeat offerings. From tourism to business opportunities, mutual funds are launching a slew of new fund offerings (NFOs), specifically in the thematic and sectoral funds space.

Highlights:

• June 2024 AMFI adta: NFO equity inflows (active) surged 54.1% month-on-month to Rs 151.4 billion.
• Tata AMC Nifty tourism index fund: Launched the first-ever tourism-focused fund, including travel and tourism-related industries. Open for public subscription from July 08 to July 19, 2024.
• ICICI Prudential oil and gas ETF: Another industry first, open for subscription from July 08 to July 18, 2024.
• Increased niche passive NFOs: Around 67 draft offer documents filed across fund houses in the last three months.

SEBI data indicates continued growth in niche areas such as digital technology, transportation, logistics, and more.
Market experts suggest that this trend will persist as investors look for thematic funds for both long-term and tactical allocation. The diverse audience in India means that niche products can suit a significant number of investors. Additionally, some industry observers believe that the rush of passive thematic NFOs allows mutual funds to bypass SEBI’s rule of only one scheme per category, leveraging the strong performance of various sectors over recent years.