India Equity Strategy_ _DREAM_ Run_ SIP Flows Remain Near All-time Peak

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Indian equity market, specifically analyzing equity fund inflows and trends in 2025 compared to 2024 [2][3][7]. Core Insights - In February 2025, equity funds experienced inflows across various categories, with Sectoral/Thematic funds leading at ₹57 billion, followed by Flexi Cap funds at ₹51 billion [2][3]. - Year-to-date (YTD) domestic equity flows in 2025 reached ₹874 billion (approximately US$10 billion), a significant increase from ₹695 billion (approximately US$8.4 billion) during the same period in 2024, marking a 25.7% increase [2][3]. - The total funds mobilized in new equity-oriented schemes launched in February amounted to ₹25 billion, primarily driven by Sectoral/Thematic funds [2]. Detailed Financial Data - The following table summarizes the equity fund flows in February 2025: - Equity Inflows: ₹390 billion in February, down from ₹485 billion in January - SIP Flows: ₹260 billion in February, slightly down from ₹264 billion in January - Non-SIP Inflows: ₹50 billion in February, down from ₹156 billion in January - ETF Inflows: ₹80 billion in February, up from ₹64 billion in January - Cash to Equity Assets: 5.2% as of January 2025, up 20 basis points month-over-month [3][7]. Additional Observations - The cash position for equity funds increased to 5.2% at the end of January 2025, indicating a cautious approach among investors [7]. - On the fixed income side, short-duration funds experienced outflows of ₹69 billion, while medium- and long-duration funds reported inflows of ₹12 billion in February [7]. - The report highlights a decline in overall equity inflows (excluding ETFs) to a 10-month low of ₹310 billion in February, compared to ₹420 billion in January [7]. Potential Risks and Considerations - The decline in non-SIP inflows and the significant outflows from short-duration funds may indicate a shift in investor sentiment and risk appetite [7]. - The report suggests that while SIP flows remain robust, the overall market dynamics could be influenced by macroeconomic factors and investor behavior in the coming months [2][7]. Conclusion - The Indian equity market shows resilience with strong SIP inflows and overall growth in equity fund mobilization, despite some signs of caution among investors. The trends observed in February 2025 will be critical for understanding the market's trajectory for the remainder of the year [2][3][7].