February MF flows: Equity mutual funds staged a strong performance in February as funds outperformed their benchmarks, a study PL Wealth Management’s showed. The wealth management arm of Prabhudas Lilladher highlights a major uptick in assets under management (AUM).

According to the study, the assets under management (AUM) of equity mutual funds witnessed a sequential increase of 2.76 per cent hitting Rs 23,12,396 crore in February 2024, up from Rs 22,50,336 crore in January 2024. The growth reinforces the continued investor confidence in equity mutual funds despite ongoing market fluctuations.

Analysing the performance of 277 open-ended equity diversified funds, the report reveals that 64 per cent of the funds have outperformed their benchmarks over the past month, ending February. This marks an improvement from the previous month, where only 51 per cent of funds managed to beat their benchmarks.

The study showed that large and mid cap funds emerging as the top performers, with an impressive 85 per cent of schemes outperforming their benchmarks. Mid cap and large cap funds followed closely behind, with 83 per cent and 77 per cent respectively, showcasing commendable performance during the same period.

However, the report also sheds light on the underperformance of small cap funds, with only 22 per cent managing to outperform their benchmarks, making it the worst-performing category in February 2024.

Delving into the aspect of alpha generation, mid cap funds showcased the highest alpha of 1.2, closely trailed by value contra dividend yield funds with an alpha of 1.1. ELSS, large and mid cap funds also demonstrated noteworthy alpha generation, each registering an alpha of 1.