BENGALURU, March 8 Reuters Inflows into India39;s equity mutual funds rose to their highest in nearly two years in February, with smallcaps leading the charge despite valuation concerns, data from an industry body showed on Friday.

Net equity mutual fund inflows rose 23.34 sequentially to 268.66 billion rupees 3.25 billion, the highest since March 2022, data from the Association of Mutual Funds in India AMFI showed.

Domestic equity mutual funds have seen net inflows for three years in a row, aggregating 4.82 trillion rupees, well above the net foreign inflows of 177.78 billion rupees.

The benchmark NSE Nifty 50 has risen 54.68 over the last 36 months, aided by mutual fund inflows.

Rising interest in sectoral and thematic funds due to the introduction of eight new funds aided equity inflows in February, said Venkat Chalasani, chief executive of AMFI.

Smallcap funds accounted for most of the investments among equityoriented schemes in terms of market capitalisation, although they moderated to 29.22 billion rupees last month from 32.57 billion rupees in January.

Inflows in midcaps shed 12.28 sequentially to 18.08 billion rupees.

Largecap equity mutual funds saw net inflows for the second straight month.

Small and midcaps stocks fell 0.31 and 0.48, respectively, in February, compared to a 1.18 gain in the Nifty 50. Their underperformance has extended into March so far.

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