Indian Equity Mutual Funds' April 2024 Investment Highlights

Equity Mutual Fund Inflows Remain Strong Despite Volatility

Despite the volatile markets and the ongoing Iran war, equity mutual funds continued to attract strong investor participation in April. According to the Association of Mutual Funds in India, equity mutual fund inflows came in at Rs 38,440 crore, a decline of around 5 percent from Rs 40,450 crore in March. However, the inflows remained well above January and February levels, signifying that investors largely stayed invested through the market swings.

Flexi-Cap Schemes Remain Favourite

Within equity funds, flexi-cap schemes were the most popular, pulling in over Rs 10,000 crore during the month. Mid and small-cap funds also continued to see strong investor interest despite valuation concerns, while inflows into large-cap funds slowed slightly.

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Portfolio Positioning Amid Uncertainty

We looked at the most popular funds across key equity categories to decode how fund managers positioned their portfolios amid the uncertainty. The schemes that received the highest inflows in April were Nippon India Large Cap Fund, HDFC Mid Cap Fund, Bandhan Small Cap Fund, Nippon India Multicap Fund, and Parag Parikh Flexi Cap Fund.

Most Popular Funds in April

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Nippon India Large Cap Fund

Managed by Sailesh Raj Bhan, Nippon India Large Cap Fund saw inflows of over Rs 1,080 crore in April, making it one of the most popular large-cap schemes. The fund has delivered nearly 17 percent annualised returns over five years and continues to maintain a fairly diversified portfolio with 64 stocks, higher than the category average of around 51 stocks. The portfolio is not overly scattered, with around 43 percent of the fund concentrated in top 10 holdings, suggesting the fund manager still has high conviction in a few core bets while spreading risk across sectors and companies.

HDFC Mid Cap Fund

HDFC Mid Cap Fund, managed by Chirag Setalvad, attracted inflows of nearly Rs 1,600 crore in April, as investors continued to favour mid-cap strategies despite market volatility. The fund has delivered over 21 percent annualised returns over the past five years and remains one of the largest schemes in the category with an AUM of nearly Rs 95,000 crore. The portfolio appears relatively diversified, holding 77 stocks compared to the category average of 69. The fund's low churn and turnover ratio suggest that it is sticking firmly to its core strategy instead of making aggressive portfolio shifts during uncertain markets.

Bandhan Small Cap Fund

Bandhan Small Cap Fund saw inflows of over Rs 1,840 crore in April, as investor appetite for high-growth small-cap strategies remained strong despite broader market volatility. Managed by Manish Gunwani, the fund has delivered nearly 23 percent annualised returns over the past five years. The fund runs a diversified portfolio with as many as 250 stocks, far above the category average of around 87. Its top 10 holdings account for just 19 percent of the portfolio, indicating that the fund is spreading risk widely instead of depending heavily on a few concentrated bets.

Nippon India Multicap Fund

Nippon India Multicap Fund, also managed by Sailesh Raj Bhan, received inflows of over Rs 1,000 crore, as investors continued to favour diversified strategies that can invest across market capitalisations. The fund has delivered more than 21 percent annualised returns over the past five years and has grown into one of the larger schemes in the multicap category. The portfolio is fairly broad-based, with 125 stocks compared to the category average of around 85. The fund maintains a relatively balanced allocation across large-, mid- and small-cap stocks, giving it flexibility to navigate changing market conditions.

Parag Parikh Flexi Cap Fund

Parag Parikh Flexi Cap Fund once again emerged as the biggest magnet for investor money in April, attracting inflows of over Rs 3,600 crore. Managed by veteran investor Rajeev Thakkar, the scheme now oversees assets of nearly Rs 1.41 lakh crore, making it India's largest active equity mutual fund by AUM. The fund runs a relatively concentrated portfolio with just 38 stocks, far lower than the flexi-cap category average of around 64. More notably, over 51 percent of the portfolio is concentrated in the top 10 holdings, reflecting high conviction in a limited set of bets rather than a widely spread portfolio. The fund appears relatively cautious, with selective reshuffling within existing holdings, prioritising stability and conviction over aggressive expansion during uncertain market conditions.