Fastest Growing Mutual Fund Categories in 2024:Equity and Hybrid Schemes Lead the Growth

Written by: Team Angel OneUpdated on: Jan 15, 2025, 3:54 PM IST

An analysis of AMFI data shows significant growth in 2024 for equity and hybrid schemes, with equity AUM rising by 40% and hybrid AUM growing by 33%

Fastest Growing Mutual Fund Categories in 2024:Equity and Hybrid Schemes Lead the Growth

The year 2024 has been transformative for the mutual fund industry in India, with notable surges in Assets Under Management (AUM) across categories. Equity and hybrid schemes have emerged as the biggest gainers, reflecting evolving investor preferences amidst a dynamic market environment. This blog analyses key trends using data from the Association of Mutual Funds in India (AMFI).

Equity Schemes: Sectoral and Thematic Funds Steal the Spotlight

Equity schemes experienced a remarkable 40% growth in AUM, from ₹22.09 lakh crore in January 2024 to ₹30.90 lakh crore in December 2024. The growth drivers were diverse, with sectoral and thematic funds leading the charge.

Top Performers in Equity Schemes

Sectoral/Thematic Funds: Registered the highest absolute growth, with AUM surging by ₹2.08 lakh crore (79%), reflecting increased investor interest in sector-specific opportunities.
Mid Cap Funds: Witnessed AUM growth of ₹1.16 lakh crore (41%), driven by strong performance in mid-sized companies.
Flexi Cap Funds: Recorded an increase of ₹1.12 lakh crore (34%), highlighting the popularity of flexible investment strategies.
Multi Cap Funds: Achieved a 60% growth in AUM, demonstrating robust performance across market capitalisation categories.

Fund Type	Jan-24 Average Net AUM (₹ in Cr)	Dec-24 Average Net AUM (₹ in Cr)	Change (₹ in Cr)	Change (%)
Sectoral/thematic fund	2,64,040	4,72,462	2,08,422	78.94
Mid-cap fund	2,85,309	4,01,252	1,15,943	40.64
Flexi cap fund	3,30,432	4,42,761	1,12,329	33.99
Small cap fund	2,39,941	3,32,952	93,011	38.76
Large & mid-cap fund	1,90,526	2,73,846	83,320	43.73
Large-cap fund	2,97,350	3,66,104	68,754	23.12
Multi cap fund	1,14,237	1,82,231	67,994	59.52
Value/contra fund	1,38,340	1,91,263	52,923	38.26
ELSS	2,01,884	2,46,088	44,204	21.90
Focussed fund	1,24,800	1,48,931	24,131	19.34
Dividend yield fund	22,312	32,206	9,894	44.34
Total	22,09,171	30,90,096	8,80,925	39.88

Hybrid Schemes: Arbitrage and Multi-Asset Funds Gain Traction

Hybrid schemes saw a 33% rise in AUM, growing from ₹7 lakh crore to ₹9.31 lakh crore in 2024. These schemes cater to investors seeking a blend of equity and debt exposure.

Highlights from Hybrid Funds

Arbitrage Funds: Topped the list with a 46% rise in AUM, reflecting their appeal in volatile markets.
Multi-Asset Allocation Funds: Experienced a staggering 90% growth, underscoring their ability to diversify across asset classes.
Balanced Advantage Funds: Grew by ₹50,948 crore (21%), maintaining their steady popularity among balanced investors.

Fund Type	Jan-24 Average Net AUM (₹ in Cr)	Dec-24 Average Net AUM (₹ in Cr)	Change (₹ in Cr)	Change (%)
Arbitrage fund	1,62,169	2,36,723	74,554	45.97
Multi-asset allocation fund	57,733	1,09,198	51,465	89.14
Balanced advantage fund	2,37,369	2,88,317	50,948	21.46
Balanced/aggressive hybrid fund	1,89,778	2,24,944	35,166	18.53
Equity savings fund	26,936	43,696	16,760	62.22
Conservative hybrid fund	26,318	28,651	2,333	8.86
Total	7,00,302	9,31,530	2,31,228	33.02

Passive Funds: ETFs Dominate Growth

Passive funds also witnessed significant momentum, with AUM increasing by 29% to ₹11.33 lakh crore.

Notable Performers in Passive Funds

Other ETFs (Equity and Bond): Saw the largest absolute increase, with AUM growing by ₹1.62 lakh crore.
Index Funds: Gained ₹75,800 crore (38%), signalling rising interest in index-based strategies.
Gold ETFs: Registered the highest percentage growth (46%), driven by renewed interest in gold as a hedge against volatility.

Fund Type	Jan-24 Average Net AUM (₹ in Cr)	Dec-24 Average Net AUM (₹ in Cr)	Change (₹ in Cr)	Change (%)
Other ETFs	6,22,215	7,84,169	1,61,954	26.03
Index funds	2,01,319	2,77,091	75,772	37.64
Gold ETFs	30,445	44,342	13,897	45.65
Overseas FoF	23,788	27,085	3,297	13.86
Total	8,77,766	11,32,688	2,54,922	29.04

Debt Funds: Money Market Funds Lead the Pack

Debt funds recorded a more modest 18.8% growth in AUM. Within this category, money market funds stood out, witnessing a 62% rise.

Top Performers in Debt Schemes

Money Market Funds: Increased by ₹93,500 crore, benefiting from short-term yield opportunities.
Liquid Funds: Grew by ₹73,900 crore (16%), remaining a preferred option for short-term investments.
Long Duration Funds: Achieved an 88% growth, the highest in percentage terms within the debt category.

Fund Type	Jan-24 Average Net AUM (₹ in Cr)	Dec-24 Average Net AUM (₹ in Cr)	Change (₹ in Cr)	Change (%)
Money market fund	1,50,977	2,44,495	93,518	61.94
Liquid fund	4,72,114	5,45,977	73,863	15.65
Corporate bond fund	1,42,363	1,71,507	29,144	20.47
Ultra short-duration fund	92,335	1,11,611	19,276	20.88
Low duration fund	99,857	1,18,039	18,182	18.21
Gilt fund	26,426	42,517	16,091	60.89
Short duration fund	1,01,396	1,14,428	13,032	12.85
Long duration fund	10,600	19,981	9,381	88.50
Dynamic bond fund	30,995	35,555	4,560	14.71
Medium to long-duration fund	10,383	11,664	1,281	12.34
Gilt fund with 10 yr constant duration	4,517	5,071	554	12.26
Overnight fund	1,00,876	1,00,857	-19	-0.02
Medium duration fund	26,295	25,265	-1,030	-3.92
Banking and PSU fund	80,090	78,244	-1,846	-2.30
Credit risk fund	23,568	20,862	-2,706	-11.48
Floater fund	56,613	52,065	-4,548	-8.03
Total	14,29,404	16,98,140	2,68,736	18.80

Conclusion: What Drives Mutual Fund Growth?

The 2024 data underscores a growing appetite for specialised and diversified investment strategies among investors. Equity schemes continue to dominate, particularly sectoral and thematic funds, while hybrid and passive funds show promising growth. Debt funds, though steady, have also highlighted specific pockets of opportunity, such as money market funds.

Disclaimer:This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jan 15, 2025, 3:54 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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